Anatomy of the Digital Payment Ecosystem in India

Abstract

The digital payment ecosystem in India has undergone a paradigm change over the last few years. Initially, the growth of the digital payments space in India was led primarily by the purely regulated model between the RBI (as financial regulator) and the banks (as an embodiment of ‘trust’). With the gradual entry of the nonbanking entities (as providers of customer centric innovations), the digital payment ecosystem has entered the expansion mode basis this “best of both worlds” model with RBI playing the role more of a supervisor of payment systems and of a catalyst/facilitator for the innovations. The purpose of this article is to outline the various initiatives and factors which are contributing towards India’s rapid growth in the digital payments space and endeavours to highlight the legal and regulatory issues developing around them.