The digital payments’ growth in the country in 2016 was second only to Russia (up 36.5 percent).

Even as critics term demonetisation a failed exercise by the Modi government which slowed down India’s growth, it actually lifted world’s electronic payments growth by one percentage point more than anticipated, a global report said. In addition, India, riding on its high growth rate in e-payments, is expected to pip both Australia and Canada in the segment in the coming two years becoming ninth- fastest, according to Capgemini’s World Payments Report 2018.

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“We could not anticipate the Indian Government’s demonetization program, announced in November 2016, which resulted in higher-than-expected growth in non-cash transactions of 33.2%, with debit debit cards contributing the highest growth of 76.2%,” the report said.

The digital payments’ growth in the country in 2016 was second only to Russia (up 36.5 percent). China was the third-highest at nearly 26 percent,” according to report. India is expected to become the ninth-largest in the world in the segment in the coming two years, Capgemini’s World Payments Report mentioned.

Driven by efforts of financial inclusion and the adoption of mobile payments, an accelerated growth rate of 16.5 percent in the developing markets of Emerging Asia, CEMEA and Latin America, it said.

“The government’s financial inclusion measures have led to higher adoption of debit and prepaid cards. Credit card volumes grew by 38.1%, compared with 27.8% in 2015,” the report said. The number of payments made through mobile wallets increased by 75.5 percent in the year 2016, the report added.

Meanwhile, on November 8, 2016, Modi government announced the demonetisation of all Rs 500 and Rs 1000 bank notes of the Mahatma Gandhi Series. It also announced the issuance of new Rs 500 and Rs 2000 banknotes in exchange for the banned bank notes.