Impact of retail payments’ digitalization on Indian Economy: A critical appraisal

Technological innovations in the Indian banking sector brought tremendous change in the way banking transactions are carried out by firms and individuals. Besides the benefits like convenience, speed and, access, events such as demonetization and covid outbreak fuelled the growth of online banking transactions even more in India. Based on the payment statistics in 2020, the share of instant payments and other electronic payments accounted for nearly two-fifth of all payments and it is estimated to grow to 71.7% by the end of 2025. The present study aimed at analysing the impact of digital payments on Indian economic growth based on the quarterly observations during the period FY 2015-16 to FY 2020-21. The results showed the existence of a long-run association and a short-run association between Gross Domestic Product (GDP) and retail digital payments.