The pandemic has accelerated India’s transition to a digital economy. From over 70% of point-of-sale (PoS) transactions done using cash in 2019, the share almost halved to 37% in 2021. Notably, the share of digital wallets in the mix has improved drastically from just 5% of PoS payments to 25% in the same period. Only China seems to be mimicking this phenomenal rise in wallet payments. The RBI’s newly introduced digital payments index also shows that digital payments surged in India, especially during the pandemic. However, the currency in circulation as a % of the GDP has crossed pre-demonetisation levels in India and is the highest among the economies compared
Wallets preferred
The chart shows the % share of point-of-sale payments done using different modes. The share of cash dropped from over 70% to 37% between 2019 and 2021. In the same period, the share of wallets increased from 5% to 25%
