Standing Committee on Communications and Information Technology presented Digital Payment and Online Security Measures for Data Protection Report

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Status of Digital Payment
- Expected to grow over threefold by 2025 due to growing Smartphone penetration, COVID-led changes in consumer behaviour and Government policies for financial inclusion
- Share of UPI transactions increased from 4% in FY2017-18 to over 64% in FY2022-23.
- Foreign entities like PhonePe and Google Pay dominate Indian fintech sector with market share of 46.91% and 36.39% respectively in terms of transaction volume in October-November 2023, whereas for BHIM UPI it is 0.22%.

Challenges in Digital Payment
- High value of money lost in cyber frauds (Rs. 5574 Crore, reported uptill September, 2023), whereas recovery rate is abysmally low.
- Recovery rate has been about 10.4% of the transactions reported over 2020 to 2022.
- Illegal and fraudulent lending apps on Google Playstore and Apple App Store.
- Virtual accounts to mask the funds trail while making payments were not monitored and could evade Anti-money laundering mechanism.

Recommendations made by Committee
- Maintaining a repository of Android and banking malwares to strengthen digital payment security.
- Multipronged approach with effective coordination of stakeholders to deal with cyber frauds.
- Promotion of Indian players in fintech sector.

Incentive scheme for promotion of RuPay Debit Cards and BHIM-UPI transactions (person-to-merchant).
Financial inclusion initiatives: PM Jan Dhan Yojana, etc.
Awareness initiatives: Stay Safe Online Campaign for adoption of digital payments, Cyber Surakshit Bharat etc.