The Reserve Bank of India (RBI) recently released a report assessing the progress the country has made moving from cash to digital payments.

According to the study, the country has seen a “steep shift” toward digital payments over the past five years.

The central bank looked at measures of cash usage compared to digital payments. According to the report, it found that cash usage is difficult to measure because of its anonymity, so it examined available cash-related numbers: the value of currency in circulation compared to gross domestic product (GDP) and the number and value of ATM withdrawals.

Unsurprisingly, the bank found that cash remains a dominant force in India.

“Cash still rules but is increasingly seen as a way to store value as an economic asset rather than to make payments,” it said in the report.

India’s cash in circulation as a percentage of GDP was at its lowest point (8.7%) during the fiscal year of 2016-2017, after demonetization. But that percentage has steadily increased to 11.2% in 2018-2019, a number that is still lower than it was in 2015-2016, before demonetization. At that time, cash in circulation as a percentage of GDP was 12.1%.

The report also noted that while cash withdrawals from ATMs have increased over the last five years, the rate of that growth has been slower than the growth of digital transactions.

The RBI found that the percentage of cash withdrawals relative to GDP has remained steady at about 17%. While the overall number of withdrawals has increased at a compound annual growth rate (CAGR) of 9% and the value of those withdrawals has increased at 10%, digital payments volume has grown at a CAGR of 61% and value at a CAGR of 19%.

In another important measure of growth, the report found that the value of digital payments to GDP grew from 660% in 2014-2015 to 862% in 2018-2019. This makes the “shift to digital payments in India clearly perceptible,” the report said.

The RBI also examined the forces that are enabling the growth of digital transactions. It noted that the number of POS terminals across the country has grown at a CAGR of 35%.

“Innovation is making domestic payments increasingly convenient, instantaneous and ubiquitous. More options are available to consumers and this is making it more convenient for them to use digital payments,” the report said.

The bank also noted the rise of QR codes and their role in making digital payments acceptance easier.

“The deployment of QR codes is expected to increase substantially in the coming years which along with physical PoS terminals will facilitate the rapid adoption of digital payments,” it said.

As of Nov. 30 last year, it said that more than 16 million payment QR codes had been deployed.

Payment facilitators have been at the forefront of growing this acceptance infrastructure. Characterized by innovative uses of technology and robust customer service, PFs are adept at reducing friction and helping more and more cash-reliant businesses move to electronic payments.

The report concluded that growing access to digital payment methods has helped lead to greater financial inclusion within India.

“Speed, convenience and competition are shaping the future of payments,” it said.