In yet another instance of dismal performance in regard to achieving its set target in physical and mobile point of sales (PoS) deployment, the government has been able to only manage 44% of its last year target.
All banks have achieved the above-mentioned percentage of the target out of 20 lakh physical and mobile deployment target in FY 2018-19, said the Ministry of Electronics and Information Technology (Meity) letter to banks quoted by ET report.
Of the target, about 41% is said to be achieved in the northeast. In rural regions, the figures are even worse, stand at 16%.
For the ongoing financial year, the govt aims to achieve 40 billion digital payments, which is 10 billion more transactions than previous fiscal.
After failing to meet the digital payments target in 2017, the government had asked all payment companies and banks to increase 50% digital transactions in April last year with 23.7 billion transactions to be recorded by the banking sector and rest 6.3 billion transactions to be done by payment wallets.
Interestingly, Govt missed the target by 4 billion, achieving only 26 billion digital transactions by March 2019.
For FY20, MeitY target is to achieve 4,019 crore digital payment transactions, out of this about 3,411 crore digital payment transactions is allocated to banks, added the report.
As per industry observers, digital transactions are still restricted to urban areas. Also with full KYC being mandated and strict data storage norms, Indian wallet companies are leading to a drop in transaction volumes across sectors.
The lack of financial literacy, regulatory requirements and absence of efficient tech infrastructure are said to be some of the major challenges in digital payment. Merchants payment are still not completely part of govt’s digital payment.
At present, the modes of digital payments operation in the country include UPI, Aadhaar-enabled payment system (AEPS), digital wallets, IMPS and POS terminals.
With the general election underway, when cash demand rises high, we have to wait and see whether govt will be able to meet its set target this financial year or continue missing targets.