The India’s reserve bank (RBI) reported that “tokenization of cards” has been given a major assumption among consumers within a period of two years, with more than 91 crore (910 million) short-on-blasts created as of December 31, 2024.
In his latest Payment system reportreleased on January 27 pointed out RBI it tokenization means that you replace actual card information with a unique code, called a “token”, which acts as an identifier for the customer’s card, which makes it possible to treat transactions. This token is specific to each unit (unit tokenization) or merchant (short-on-filtocenization), which ensures that traders do not store customers’ actual card information. The process also helps to protect card details in the event of security violations.
RBI said that the approved unit tokenization in January 2019 and short-on-blanket (CHOF) in September 2021. Since then, tokenization has seen rapid assumption, with over 91 crore (910 million) tokens issued in December 2024. These symbols have seen a Quick assumption, with over 91 crore (910 million) tokens issued in December 2024. These symbols have seen a quick assumption, with over 91 crore (910 million) tokens issued in December 2024. These symbols have seen a quick assumption, with Over 91 crore (910 million) tokens issued in December 2024. These tokens have seen quickly assumption, with over 91 crore (910 million). Facilitated more than 320 crore (3.2 billion) transactions.
RBI’s report stated that the use of tokens for e-commerce transactions has eliminated the need for merchants and payment units for storing card data, which results in almost 98% of e-commerce transactions being processed without using actual card data.
Is based on the success of tokenizationSeveral new features have been introduced to improve customer convenience. These improvements allow customers to at the same time tokenize their cards over several leading merchants with their consent.
“In recent years digital payments in India have witnessed a phenomenal growth that emerges from the spectacular advances of Uniform payment interface .
Digital payments in India Has experienced a five -year composed annual growth rate (CAGR) of 45.9% in volume and 10.2% in value. Specifically, UPI saw a Cagr of 74% in volume and 68.14% in value from 2019 to 2024.
“Digital payments in India have grown from 162 crore (1.6 billion) transactions during the financial year 2012-13 to over 16,416 crore transactions during the financial year 2023-24 (which is) about 100 times increased for 12 years. The remarkable growth in payment infrastructure and payment performance is also stated in Digital payment index Published by the RBI, which has witnessed more than a four -fold increase over the past six years, ”Sanks pointed out.
In the development of the payment ecosystem, the RBI has placed equal emphasis on ensuring its safety and security, as well as protecting consumers, Sanks said. Measures such as two -factor authentication for payment security have been encouraged, although such methods are not yet compulsory in many developed countries.
Cross -border payments still expensive, slow
While domestic payment systems have become cheap and fast, cross -border payments remain expensive and slow.
“The reserve bank focuses on linking the rapid payment systems (FPS) with it in other countries to offer a seamless and less cost -breaking payment experience,” pronounced sleeps.
This mechanism and methodology for managing the challenges of improving cross -border payments—Such as a high cost, low speed, limited access and limited openness-have also been recognized by the international standard setting bodies, such as Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI) and others.
“The Uniform payment interface (UPI) from India and Paynow in Singapore were linked through extensive cooperation between RBI and monetary authority in Singapore. New information shows that the cost of sending a transfer has decreased noticeably, ”added Sanks.
In addition, RBI has become part of Project Nexus, a global initiative to facilitate immediate cross -border retail payments by connecting domestic fast payment systems in different countries. Payments to merchants via Indian UPI apps using QR codes have been activated in countries such as Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka and the United Arab Emirates.
According to the World Bank’s data mentioned in its report, the RBI stated that India continues to be the leading recipient of global foreign transfers and received a record $ 129 billion in 2024 (estimated), almost twice as much as Mexico, which came in second place with $ 68 billion. This highlights India’s prominent role in Global Remittance MarketMainly supported by its extensive diaspora, which contributes significantly to currency reserves and economic stability.
In the case of outflowing on transmission, the US top sender remains globally, with $ 93 billion sent in 2023, which far exceeds other countries such as Saudi Arabia and Switzerland, each sent about $ 38 billion. The United Arab Emirates are also ranked high in abundance of transmission and maintains its status as a larger sender.
UPI that drives digital payment growth
“UPI has driven India at the forefront In the provision of digital payment solutions as “public”. This general good approach has the potential to be adopted by other economies, regardless of the stage of development they are located, says RBI’s report.
“UPI and its functions have lessons on democratization of the payment system at the least value and penetration of digital payments to previously unreasonable segments,” the report dedicated.
UPI has played an important role in running The growth of digital payments in India. Its share of digital payment volume increased from 34% in 2019 to remarkable 83% in 2024, which reflected a composed annual growth rate (CAGR) of 74% for five years. By comparison, the proportion of other payment systems, such as RTG, NEFT, IMPS, credit card and debit card, fell from 66% to 17% during the same time frame.
According to the RBI report, UPI’s Person-to-Merchant (P2M) transaction volumes have specially exceeded personal-to-person transactions (P2P), which reflects an increase in the trading post and the growth of supportive infrastructure.
Upi a little For low value transactions and UPI Lite X for offline payments have been launched, extended access and improves convenience.
“In the case of payment systems, Reserve Bank has always strived to stay before the curve … run by innovation and regulatory support, our payment systems have become one of the most modern worldwide,” added Sanks.
See: Tim Draper Talks Tokenization with Kurt Wuckert Jr.
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