Status of Digital Payments in BRICS Countries

Abstract

Rapid technological advancements and FinTech initiatives in the recent past have been facilitating the transformation of financial and payment services across the globe. The present study examines the status of digital payments, digital payment environment and digital financial inclusion among the BRICS countries. The digital payment trends in the BRICS countries for the period 2011–2021 through the access and use indicators of digital payments are compared. There exist significant differences between the BRICS countries and the developed countries for both the access and use indicators of digital payments, which requires the respective governments and central banks of BRICS countries to take necessary steps to achieve the goal of digital financial inclusion.

JEL Codes: E42, E58

Keywords

BRICS digital payments financial inclusion account ownership mobile payments

I. Introduction

Rapid technological advancements and FinTech initiatives regarding digital payments have been facilitating the transformation of financial and payment services across the globe. With digital payments emerging as leading payment instruments, the global payment environment is undergoing a complete transformation.

Owing to the COVID-19 pandemic, economies throughout the world are no longer considering digital payments as an option but as an inevitable way of making and receiving payments in the future. Covid-19 provided opportunity for the digital payments market to grow across the world including India. There was a cross-generational shift of digital payments to older people (56 years or above) during the pandemic period increasing their adoption of such payments (World Payment Report, 2020). The nationwide 68-day lockdown in 2020 spurred digital payments in India with a rise of digital transactions by 28% in 2021 as compared to 2020 (Saroy et al., 2022). Lockdown and social distancing norms induced customers to shift to digital payment instruments for their purchases and banks also directed their customers to avoid physical contact with cash and made the adoption of digital payments more convenient for their customers (Jonker et al., 2021; Alber and Dabour, 2020).

Digital payments benefit customers, merchants, banks, small and large businesses and the government. Digital payments offer customers more flexibility, convenience and efficient alternative payment modes. Banks and non-bank payment service providers offer various payment options for customers to accept and adopt non-cash transactions, leading to more revenue for the service providers. Businesses and merchants are also accepting digital payments more due to FinTech innovations and quick settlements. Governments also take advantage of speedy payments and technological innovations to pay employees and remit benefit transfers to businesses and the common public (Bostic et al., 2020). The use of digital payment modes, like debit cards and ATMs, also reduces the transaction costs of payments and augments financial inclusion (Bachas et al., 2018). The reduction in transaction cost, if coupled with the subdued endowment effect, can also lead to increased consumer spending as the consumers feel less attached to the money with the use of digital payments (Agarwal et al., 2024). However, the cost of technology, consumers’ low socio-economic background, trust issues, inadequate access to digital infrastructure and tax and security complications act as hindrances in the adoption of digital payments (Seethamraju & Diatha, 2018).

The use of digital payments has been nearly universal in high-income economies and is rapidly rising in developing economies, with the growth in digital payments outnumbering the growth in account ownership (The Global Findex Database, 2021). The World Payment Report (2023) estimated that global non-cash payments’ volume was expected to reach 1.3 trillion in 2023 and 2.3 trillion in 2027 at a yearly growth rate of 16.6 per cent. The global non-cash payments volume is expected to grow at a compound annual growth rate (CAGR) of 15 per cent for 2022–2027 at an accelerating pace due to the digital payment infrastructure development and rapid increase in new non-cash payment instruments.

The BRICS countries constitute an important part of the world economy. In 2023, the combined population of these countries was nearly 3 billion (42 per cent of the world population), the combined land area of 40 million square kilometres (around 30 per cent of the land area of the world), the combined GDP of $24 trillion (around 26 per cent of the global GDP), and the combined world trade of $3 trillion (around 20 per cent of the global trade) (https://www.brics-pay.com/; https://brics2021.gov.in/about-brics). BRICS countries, especially the emerging market economies due to their demographic and economic importance, are significantly influencing the global environment (Bhurat, 2019). The present study examines the status of digital payments, digital payment environment and digital financial inclusion among BRICS countries.

Digital Payment Environment and Digital Financial Inclusion among BRICS Countries

According to the BRICS Digital Financial Inclusion Report (2021), universal financial inclusion has been acting as a development priority for BRICS countries to facilitate digital financial inclusion. Digital financial inclusion extent broadly refers to the employment of digital financial services to enhance financial inclusion among nations. Government or central banks of BRICS nations have undertaken several initiatives in the past decade to provide easy and extensive access and less expensive financial services to all sections of society. Each BRICS country has its own digital payment infrastructure for quick and secure transactions. The status of several initiatives taken by the respective governments of BRICS nations is reported in the text following.

Brazil

The Central Bank of Brazil launched ‘Pix’ as an instant payment service in 2020 to facilitate citizens, businesses and governments in making financial transactions. Pix has become the closest digital payment alternative to cash as it allows the transfer of funds from one bank account to another. Brazilian Open Banking Project (BOBP) launched in 2021; applications and services about data exchange, payment initiation, credit proposals and other financial services were allowed using an open application programming interface (API). In 2003, to bring low-income women into the ambit of financial inclusion, the Government of Brazil launched a programme called Bolsa Familia Program allowing monthly cash transfers to household females on the condition of keeping children enrolled in schools and their regular health checkups (BRICS Digital Financial Inclusion Report, 2021).

The GDP of Brazil was $1,920,095.78 million, population of 215,313.50 thousand and per capita GDP of $8,917.7 in 2022 (IBRD, 2022). The most popular digital payment modes in Brazil include Mastercard Local payment card, Elo local payment card, Pix bank transfer, Boleto Bancario cash transfers, PayPal wallet and others (https://www.ppro.com/countries/brazil/). In 2020, the number of commercial bank branches per 1,000 adults in Brazil was 17.94 which reduced to 16.55 in 2022, whereas the number of ATMs per 1,000 adults was 96.42 in 2020 which increased to 97.94 in 2022. The number of debit cards per 1,000 adults was 988.66 in 2020, which rose to 1,004 in 2022 and the number of credit cards per 1,000 adults was 801.3 in 2020, which increased to 1,219.56 in 2022 (IMF Financial Access Survey, 2023). Almost every Brazilian citizen possessing a debit card, most of them also holding credit cards and support of an excellent network of ATMs, must have made retail payments and funds transfers, convenient for them, which further reduced the need for bank branches.

Russia

To promote financial inclusion, a national digital platform called ‘Unified Biometric System’ (UBS) was launched in June 2018, which helped individuals to open deposit accounts and receive loans through remote identification using only biometric personal data (facial and voice recognition) across the country, promoting rapid digitalisation of financial services. In 2019, the Bank of Russia (BoR) and the National Payment Card System jointly launched ‘Faster Payment System’ (FPS), facilitating instant round-the-clock inter-bank transfers using mobile numbers only, allowing both person-to-person (P2P) and business-to-person (B2P) transfers, thus providing cheaper and quality payment service to citizens. The BoR also launched a mobile application in 2020 called ‘CB Online’ which provides its citizens access to financial information, verifies the credibility of financial institutions, and handles customer complaints (BRICS Digital Financial Inclusion Report, 2021).

The GDP of Russia was $2,240,422.43 million, population of 144,236.93 thousand and per capita GDP of $15,270.7 in 2022 (IBRD, 2022). The payment modes in Russia include the Bank of Russia Payment System for money transfers and completing settlements, the Faster Payment System (SBP) for 24/7 inter-bank transfers using only mobile numbers or QR codes, credit transfers, direct debits, payment cards and other payment instruments (https://www.cbr.ru/eng/Psystem/). In Russia, the number of commercial bank branches per 1,000 adults was 26.26 in 2018 which reduced to 24.59 in 2020, whereas the number of ATMs per 1,000 adults was 161.11 in 2018 which increased to 164.93 in 2020. The number of debit cards per 1,000 adults in Russia was 2,002.78 in 2018 which rose to 2,265.14 in 2020 and the number of credit cards per 1,000 adults was 295.81 in 2018 which increased to 332.73 in 2020 (IMF Financial Access Survey, 2023). The data show the excellent state of digital infrastructure consisting of bank branches, debit and credit cards and ATMs. The low level of credit cards as compared to debit cards reveals little preference for using credit from banks as compared to savings by the Russians.

India

The financial inclusion efforts in India evolved through the JAM trinity (Jan Dhan, Aadhaar and mobile phones) followed by the Government of India. Aadhaar-enabled Payment System (AePS), Aadhaar Payment Bridge System (APBS), National Automated Clearing House (NACH) and others facilitate online interoperable fund transfers in Aadhaar-linked bank accounts. ‘Unified Payment Interface’ (UPI) was launched in August 2016 as a mobile-based 24/7 payment instrument that enables users to instantly send and receive money through a Virtual Payment Address (VPA) set by users themselves, thus precluding the sharing of bank details for transfers. The RBI has also developed a Payment Infrastructure Development Fund (PIDF) for the deployment of Point of Sale (PoS) terminals in various cities of the country. The interoperability of the payment system facilitating the ease of transactions, along with strong customer protection, has made India’s retail payment system the safest in the world (BRICS Digital Financial Inclusion Report, 2021). The Aadhaar-enabled e-KYC initiative simplified access to a range of financial services. RBI also introduced a legal framework called account aggregators in 2016, which allows customers’ data to be shared within the regulated financial system only with the consent and knowledge of customers, thus ensuring data privacy (D’Silva et al., 2019).

Government initiatives have improved financial inclusion in India, for instance, only 35 per cent of adults had formal accounts in 2011, which increased to 53 per cent in 2014, 80 per cent in 2017 and 78 per cent in 2021 (The Global Findex Database, 2014, 2017, 2021). The Global Findex Database 2014 stated that 125 million new bank accounts were opened under the PM Jan Dhan Yojana scheme launched in August 2014, but 72 per cent out of 97 per cent of new accounts opened were dormant accounts or had zero balance by the end of January 2015. Thus, the goal of financial inclusion has not been fully achieved to date as many citizens still remain unserved or underserved.

The GDP of India was $3,416,645.83 million, a population of 1,417,173.17 thousand and per capita GDP of $2,410.9 in 2022 (IBRD, 2022). The payment systems used in India encompass real-time gross settlement (RTGS) for large value credit transfers; AePS, APBS, Immediate Payment Service (IMPS), NACH Credit, National Electronic Funds Transfer (NEFT) and UPI for retail credit transfers; BHIM Aadhar Pay, NACH Debit and National Electronic Toll Collection (NETC) for retail debit transfers; credit cards and debit cards for card payments; e-wallets and prepaid cards as prepaid payment instruments and other paper-based instruments (https://www.rbi.org.in/scripts/paymentsystems_um.aspx).

In India, the number of commercial bank branches per 1,000 adults was 14.57 in 2020 which declined to 14.31 in 2022, the number of ATMs per 1,000 adults was 21.23 in 2020 which rose to 24.64 in 2022, the number of registered mobile money accounts per 1,000 adults were 1,650.86 in 2020 which declined to 1,151.11 in 2022. The number of debit cards per 1,000 adults was 803.06 in 2020 which rose to 866.92 in 2022 and the number of credit cards per 1,000 adults was 55.97 in 2020 which rose to 69.56 in 2022 (IMF Financial Access Survey, 2023). The data show a significant increase in registered mobile money accounts and debit cards, but the number of ATMs is still very less as compared to other BRICS countries.

China

People Bank of China (PBoC) launched the Internet Banking Payment System (IBPS) in 2010, which facilitated real-time internet banking transactions for inter-bank debit and credit transfers. PBoC also developed various inter-bank clearing systems in 2002, such as the China National Advanced Payment System (CNAPS) and China Domestic Foreign Currency Payment System, to support cards and payment instruments. Developed in 2002, China Union Pay serves as the base for the interoperability of payment and banking cards upon which various online payment platforms operate. PBoC launched the Lankao Pilot Zone Model aimed at strengthening the financial inclusion infrastructure and digital payment technologies (BRICS Digital Financial Inclusion Report, 2021).

The GDP of China was $17,963,171.48 million, population of 1,412,175 thousand and per capita GDP of $12,720.2 in 2022 (IBRD, 2022). The payment methods in China include bank transfers, card payments, e-wallets and other payment instruments, of which the popular payment methods are Alipay wallet, UnionPay SecurePay local payment card and WeChat Pay wallet (https://www.ppro.com/countries/china/). The number of commercial bank branches in China was 8.77 per 1,000 adults in 2020 which slightly increased to 8.80 per 1,000 adults in 2022 and the number of ATMs per 1,000 adults was 87.65 in 2020 which declined to 76.67 in 2022. The number of debit cards per 1,000 adults in China was 7,068.96 in 2020 which rose to 7,427.55 in 2022 and the number of credit cards per 1,000 adults was 672.58 in 2020 which marginally increased to 682.86 in 2022 (IMF Financial Access Survey, 2023). The data reveal that China is relying more on digital payment technologies and less on physical bank branches.

South Africa

South African Reserve Bank (SARB) operates ‘South African Multiple Option Settlement’ (SAMOS) for domestic higher value RTGS and BankServ Africa for settlement of retail or lower value payments within the country. SARB and Central Banks of the South African Development Community (SADC) own ‘SADC-RTGS’, which settles large-value cross-border transfers requiring immediate settlement within the SADC. South Africa also launched Real Time Clearing (RTC) in 2006 as its instant payment method for the immediate settlement of transactions. Payment Clearing House System Operator Strate (Pty) Limited operates a large-value payment system and provides clearance for money market transactions. Risk-based KYC and the government’s microinsurance initiatives have also emerged as enablers for financial inclusion and reducing inequalities in financial services in South Africa (BRICS Digital Financial Inclusion Report, 2021).

The GDP of South Africa was $405,270.85 million, population of 59,893.89 thousand and per capita GDP of $6,766.5 in 2022 (IBRD, 2022). The payment methods in South Africa include bank transfers, debit and credit cards, e-wallets and PayPal wallet and MasterPass e-wallet service provided by Mastercard (https://www.ppro.com/countries/south-africa/). In South Africa, the number of commercial bank branches per 1,000 adults was 9.29 in 2020 which slightly declined to 9.10 in 2022 and the number of ATMs per 1,000 adults was 59.04 in 2020 which decreased to 50.38 in 2020. The number of registered mobile money accounts per 1,000 adults in South Africa was 72.09 in 2020 which increased to 191.88 in 2022 (IMF Financial Access Survey, 2023). The data show that the use of digital payment technologies in South Africa is comparable with the other BRICS countries.

Central banks of BRICS economies play an important role in their respective country’s payment systems and each country has distinct statutory authority for regulation and supervision of payment services; several features related to payment services are common to all BRICS countries (Shamraev, 2019). Digital cooperation was much needed in BRICS countries in the fields of electronic payments, e-commerce tools, blockchain technology and others (Yampolskaya et al., 2021). The deployment of broadband networks (both fixed and mobile broadband) was the primary driver for the development of the digital ecosystem (Katz & Callorda, 2018). An increase in internet access has led to increased digital transactions and an increase in active accounts has led to increased use of debit/credit cards (Bhurat, 2019). Nagpal et al. (2020) reported that increased internet usage and mobile penetration have improved financial inclusion indicators in BRICS economies. Network interoperability affected competition both in the telecom market and payments market (Bianchi et al., 2023). Infrastructure indicators affecting the digital ecosystem in BRICS countries are summarised in Table 1 and factors affecting the digital payment environment in BRICS countries are reported in Table 2.

Table 1.

Infrastructure Indicators Affecting the Digital Payment Environment in BRICS Countries (Statistics in 2022).

Indicator	Brazil	Russia	India	China	South Africa
Connectivity
a) Individuals using internet (% of population)	80.53	90.42	46.31 (in 2021)	75.61	74.70
b) Fixed broadband subscription (per 100 people)	21.53	24.63	2.35	41.37	3.12
c) Mobile cellular subscription (per 100 people)	98.89	168.98 (in 2021)	80.65	124.88	167.40
d) Access to electricity (% of population)	100	100	99.2	100	86.50
Governance
a) Regulatory authority autonomy in decision-making	No	No	Yes	No	Yes
b) Enforcement powers of ICT regulator	Regulatory authority	Regulatory authority	Regulatory authority and sector ministry	Sector ministry	Regulatory authority and judiciary
c) Separate ICT regulator	Yes	No	Yes	No	Yes
Market
a) Level of competition	Full	Full	Full	Full	Monopoly
b) Broader regulatory incentives for telecom/ICT operators	Temporary licenses/exemption for certain services and regulatory holidays	Temporary licenses	Temporary licenses/exemption for certain services, authorisation for pilot projects and regulatory sandboxes	Temporary licenses	Temporary licenses/exemption for certain services, authorisation for pilot projects
c) Digital development strategies	Yes	Yes	Yes	Yes	Yes

Source: World Development Indicators and International Telecommunication Union’s information and communication technology (ICT) statistics and regulatory information and BRICS Digital Financial Inclusion Report (2021).

Table 2.

Factors Affecting the Digital Payment Environment in BRICS Countries.

Factor	Brazil	Russia	India	China	South Africa
Technology/Infrastructure	Technology and infrastructure vary widely between urban and rural areas with the former having better access.	There is a problem of uniform digital payment adoption mode due to the vast geographical area and diverse infrastructure developed.	Infrastructure facilities such as poor internet connectivity and uneven access in rural areas act as hindrances in the adoption of digital payments.	Advanced technological infrastructure such as high smartphone penetration and wide internet access support digital payments.	Growth of digital payments is hindered by technological issues related to reach and reliability.
Economic factors	Instability of the economy and inflation act as inhibitors in the growth of digital payments.	Economic sanctions and geopolitical tensions affect the development of digital payment modes.	Large young population driven by economic growth led to a rise in the adoption of digital payments.	Large middle-class income population and rapid economic growth drive the adoption of digital payments.	Lower income levels and economic inequality curtail the growth of digital payments.
Regulatory factors	Brazilian government’s regulatory measures involve the introduction of the Pix instant payment system.	Regulatory measures involving strict control and monitoring of financial framework enhance the adoption of digital payments.	Regulatory initiatives and policy changes, such as the introduction of UPI and BHIM, are facilitating the growth of digital payments.	Heavy regulation of the digital payment market by the government.	Heavy regulatory measures by the government aimed at consumer protection act as a hurdle for new market entrants.
Government support	Government support involves the expansion of the digital payments system with initiatives aimed at the underserved population.	Government focuses on financial inclusion with initiatives to reach the rural and underbanked population.	Government initiatives such as Jan Dhan accounts and UPI aimed at augmenting financial access to the underserved population.	Promotion of financial inclusion through the expansion of digital payment services in the rural areas by the government.	Government programmes aimed at the expansion of financial services by making digital payments a priority.

Source: BRICS Digital Financial Inclusion Report (2021).

Table 1 reveals that India ranks the lowest in the connectivity indicators in terms of internet usage, fixed broadband subscription and mobile cellular subscription. South Africa has the lowest access to electricity amongst BRICS countries in 2022. India and South Africa have heavy governance for information and communication technology (ICT) regulators among BRICS countries, regarding the market indicators, there is almost a similar scenario in all BRICS countries with full competition, temporary licenses for ICT operators and formulation of digital development strategies.

II. Data Analysis and Findings

The digital payment trends amongst BRICS countries are assessed through ‘access’ and ‘use’ indicators, thus the present study is descriptive in nature. These trends are examined for the period 2011–2021 and the data are extracted from the World Bank’s Global Findex Database, 2011, 2014, 2017 and 2021 and G20 Financial Inclusion Indicators. In Section A, ‘Access Indicators’ and in Section B, ‘Use Indicators’ are reported.

Section A: Access Indicators

Access indicators include ‘Account Ownership’ and ‘Mobile Money Account Ownership’. Account Ownership represents the account (individual or joint) ownership percentage of the age 15+ population at regulated institutions, such as banks, credit unions, microfinance institutions, post offices or mobile money service providers. The data about the percentage of ‘Account Ownership’ and percentage change in ‘Account Ownership’ from 2011 to 2021 are reported in Table 3.

Table 3.

Percentage of Account Ownership and in Parenthesis Percentage Change from 2011 to 2021.

Country	2011	2014	2017	2021	Percentage Change from 2011 to 2021
Brazil	56	68 (12)	70 (2)	84 (14)	28
Russia	48	67 (19)	76 (19)	90 (14)	42
India	35	53 (18)	80 (27)	78 (–2)	43
China	64	79 (15)	80 (1)	89 (9)	25
South Africa	54	70 (16)	69 (–1)	85 (16)	31

Source: The Global Findex Database (2021).

As shown in Table 3, in 2011, China had the highest ‘Account Ownership’ of 64 per cent, followed by Brazil with 56 per cent, closely followed by South Africa with 54 per cent, Russia with 48 per cent, and India had the lowest ‘Account Ownership’ of 35 per cent among BRICS nations. During the period 2011–2014, Russia brought the highest change in ‘Account Ownership’ by 19 per cent, closely followed by India, South Africa and China with 18 per cent, 16 per cent and 15 per cent, respectively, and Brazil with 12 per cent. During the next 3 years from 2014 to 2017, India brought the highest change in ‘Account Ownership’ by 27 per cent, followed by Russia with 19 per cent, Brazil with 2 per cent and China with 1 per cent, whereas South Africa’s ‘Account Ownership’ declined by 1 per cent. For the period 2017–2021, South Africa brought the highest change in ‘Account Ownership’ by 16 per cent followed by Russia and Brazil with 14 per cent each and China with 9 per cent, but India’s ‘Account Ownership’ during this period declined by 2 per cent.

India had the lowest ‘Account Ownership’ of 35 per cent and China had the highest of 64 per cent in 2011, and there was a gap of 29 per cent. During the period 2011–2021, India’s ‘Account Ownership’ has grown by 43 per cent but still, it is the lowest in the group with ‘Account Ownership’ of 78 per cent. Whereas, Russia had the second lowest position with 48 per cent ‘Account Ownership’ in 2011, which grew by 42 per cent during this period, putting Russia in the leading position with 90 per cent ‘Account Ownership’ and China is the runner-up with 89 per cent ‘Account Ownership’. The gap between the country (Russia) having the highest ‘Account Ownership’ percentage of 90 and the country (India) having the lowest percentage of 78 has reduced to 12 in 2021.

‘Account Ownership’ was 100 per cent in 2021 in developed countries, such as Denmark, Sweden, Ireland, Germany, Netherlands and Iceland, thus, BRICS countries are not far behind from reaching the goal of 100 per cent ‘Account Ownership’. A little further push and consistent efforts on the part of BRICS countries will help these countries to achieve the goal of 100 per cent ‘Account Ownership’ in the upcoming few years.

Mobile Money Account Ownership

Mobile Money Account Ownership represents the population of age 15+ who personally used mobile money service in the past 12 months to make or receive payments or buy things or send money (The Global Findex Database, 2021). Mobile Money Account Ownership is unconditional upon account ownership implying that an individual does not need a bank account to have a mobile money account; the only prerequisite required is a basic mobile phone (IMF Financial Access Survey Guidelines and Manual, 2019). For a mobile money account, the customer only needs to register with a mobile money agent to get an individual virtual account linked to their mobile phone number and accessible through a SIM card. Mobile money is a financial service provided by the mobile network operator itself or in partnership with another entity and is thus independent of traditional banking/mobile banking services (International Monetary Fund Statistics, 2019).

As shown in Table 4, in 2014, Mobile Money Account Ownership was 14 per cent in South Africa, which was the highest among the BRICS countries, followed by India with just 2 per cent and Brazil with just 1 per cent. During the period 2014–2017, South Africa brought the highest change in Mobile Money Account Ownership of 5 per cent followed by Brazil with a 4 per cent increase in mobile money accounts, but in India, there was no change in Mobile Money Account Ownership during this period. During the period 2017–2021, Russia brought the highest increase in Mobile Money Account Ownership of 33 per cent followed by Brazil with 22 per cent, South Africa with 18 per cent, and India with an 8 per cent increase in Mobile Money Account Ownership.

Table 4.

Percentage of Mobile Money Account Ownership and in Parenthesis Percentage Change from 2014 to 2021.

Country	2014	2017	2021	Percentage Change from 2014 to 2021
Brazil	01	05 (04)	27 (22)	26
Russia	N.A.	N.A.	33 (33)	33
India	02	02 (00)	10 (08)	08
China	N.A.	N.A.	N.A.	–
South Africa	14	19 (05)	37 (18)	23

Source: The Global Findex Database (2021).

Note: N.A.: Data are not reported.

During the period 2014–2021, Russia has shown the highest increase in Mobile Money Account Ownership of 33 per cent followed by Brazil with 26 per cent and South Africa with 23 per cent. South Africa has occupied the leading position in Mobile Money Account Ownership with 37 per cent of mobile money accounts, whereas India with just 10 per cent Mobile Money Account Ownership is the lowest amongst the BRICS with only 8 per cent increase in its mobile money accounts and there is a huge gap of 27 per cent between the two countries.

It is important to note that in 2021, Kenya has 69 per cent Mobile Money Account Ownership, followed by Ghana with 60 per cent, Thailand with 60 per cent, Mongolia with 59 per cent and Gabon with 57 per cent, which is significantly higher than Mobile Money Account Ownership in BRICS countries. Thus, there is a huge scope for promoting Mobile Money Account Ownership in BRICS countries to expedite the digitalisation of payment technology.

Section B: Use Indicators

Use indicators comprise the use of mobile payments, debit cards or credit cards and digital payments. Mobile Money Account Usage represents the use of a mobile money account at least two or more times a month in the past 12 months by the population aged 15+ (The Global Findex Database, 2021). Mobile Money Account Usage depicts a pay-as-you-go digital medium of exchange and store of value using mobile money accounts offered by mobile money networks (IMF Financial Access Survey Guidelines and Manual, 2019). A mobile money account user can make peer-to-peer transfers, in-store purchases, payment of bills, remittance and savings, credit and insurance, balance inquiries and others across mobile money accounts. Mobile Money Account Usage involves the transfer, deposit and withdrawal of money through a mobile money app without even owning a bank account (Suri et al., 2023). Mobile Money Account Usage data are available for the year 2021 only.

As shown in Table 5, in 2021, South Africa with 20 per cent Mobile Money Account Usage was leading in mobile money accounts’ usage followed by Brazil with 14 per cent. India with 8 per cent and Russia with 6 per cent Mobile Money Account Usage were the countries with a low percentage use of mobile money accounts among the BRICS countries.

Table 5.

Percentage Use of a Mobile Money Account Two or More Times a Month in 2021.

Country	Brazil	Russia	India	China	South Africa
Mobile Money Account Usage	14	06	08	N.A.	20

Source: The Global Findex Database (2021).

Note: N.A.: Data are not reported.

Ghana with 52 per cent Mobile Money Account Usage followed by Kenya with 51 per cent, Gabon with 47 per cent and Eswatini with 40 per cent were countries having the highest Mobile Money Account Usage in 2021 (The Global Findex Database, 2021). Mobile Money Account Usage in Ghana has been promoted through Interactive Voice Response (IVR) which provides information to rural clients on accessing their bank accounts at low cost, due to which more banking transactions are being conducted through mobile money (Riley & Shonchoy, 2022). In Kenya, mobile payment usage has been driven by the successful launch of the M-PESA mobile app in 2007, providing a consumption smoothing effect and almost universal coverage in the Kenyan economy (Suri et al., 2023). There is a huge scope for growth of Mobile Money Account Usage among BRICS countries. The low usage of Mobile Money accounts as compared to the ownership of Mobile Money accounts in BRICS countries could be due to less internet penetration, network connectivity issues or less digital financial literacy.

Card usage: Card usage represents the usage of debit and credit cards by account holders aged 15+.

As shown in Table 6, in 2014, with 42 per cent debit card usage, Brazil was at the top, followed by South Africa with 41 per cent usage, Russia with 35 per cent, China with 17 per cent and India with just 11 per cent debit card usage. In the same year, with 28 per cent credit card usage, Brazil was again at the top, followed by Russia with 17 per cent, China with 14 per cent, South Africa with 11 per cent and India with just 4 per cent usage of credit cards. During the period 2014–2017, China brought the highest change of 20 per cent of debit cards followed by Russia with 7 per cent and India with 1 per cent increase in the use of debit cards, whereas South Africa and Brazil showed a decline of 18 per cent and 9 per cent in the usage of debit cards. During the same period, China showed an increase of 2 per cent in the usage of credit cards, whereas Brazil, Russia and India showed a decline of 5 per cent, 2 per cent and 1 per cent in the usage of credit cards, respectively. During the period 2017–2021, South Africa brought a 25 per cent increase in the usage of debit cards, which was the highest among BRICS countries, followed by Brazil and Russia with 12 per cent and China with an 8 per cent increase in usage of debit cards. Whereas, regarding credit cards, China brought an increase of 15 per cent in usage, followed by Brazil with 13 per cent and Russia with 5 per cent usage, whereas South Africa showed a decline of 3 per cent.

Table 6.

Percentage of Card Usage and in Parenthesis Percentage Change from 2014 to 2021.

Country	2014		2017		2021		Percentage Change from 2014 to 2021
Country	Debit Card	Credit Card	Debit Card	Credit Card	Debit Card	Credit Card	Debit Card	Credit Card
Brazil	42	28	33 (–09)	23 (–5)	45 (12)	36 (13)	03	08
Russia	35	17	42 (07)	15 (–2)	54 (12)	20 (5)	19	03
India	11	04	12 (01)	03 (–1)	12 (0)	N.A.	01	–01
China	17	14	37 (20)	16 (2)	45 (8)	31 (15)	28	17
South Africa	41	11	23 (–18)	N.A.	48 (25)	08 (–3)	07	–03

Source: The Global Findex Database (2021).

Note: N.A.: Data are not reported.

During 2014–2021, China showed the highest increase in the usage of both debit cards and credit cards of 28 per cent and 17 per cent, respectively, followed by Russia with 19 per cent in case of debit cards and Brazil with 8 per cent in case of credit cards. India could increase usage of debit cards by 1 per cent only and registered a decline of 1 per cent in the usage of credit cards, placing India at the lowest level among BRICS regarding usage of both debit cards and credit cards.

In 2021, debit card usage was found to be the highest in Denmark with 97 per cent of debit card use followed by Norway (96 per cent), Sweden (95 per cent), Finland (95 per cent) and the Netherlands (94 per cent). Whereas, credit card usage was found to be the highest in Canada (79 per cent) followed by Israel (74 per cent), Hong Kong (69 per cent) and Iceland (68 per cent). Thus, there exists a huge gap between the countries with both the highest debit and credit card usage and BRICS countries showing a significant scope for growth in debit and credit card usage.

Digital payments: Digital payments are the use of a mobile money account, debit or credit card or mobile phone or internet to make payment from an account (The Global Findex Database, 2021). It represents the digital payment made or received by a population of age 15+.

As shown in Table 7, in 2014, South Africa had the highest use of digital payments of 66 per cent, closely followed by Brazil (59 per cent), Russia (58 per cent) and China (49 per cent), and India had the lowest use of digital payments with only 22 per cent among BRICS nations. During the period 2014–2017, China showed the highest increase in digital payments of 18 per cent followed by Russia and India with 13 per cent and 7 per cent, respectively, whereas the use of digital payments declined in South Africa and Brazil by 6 per cent and 1 per cent, respectively. During the period 2017–2021, South Africa brought the highest increase in the use of digital payments by 21 per cent, followed by Brazil (19 per cent), China (19 per cent) and Russia (16 per cent), and India with a 6 per cent increase in the use of digital payments showed the lowest change in its use of digital payments.

Table 7.

Percentage of Digital Payment Made or Received and in Parenthesis Percentage Change from 2014 to 2021.

Country	2014	2017	2021	Percentage Change from 2014 to 2021
Brazil	59	58 (–01)	77 (19)	18
Russia	58	71 (13)	87 (16)	29
India	22	29 (07)	35 (06)	13
China	49	67 (18)	86 (19)	37
South Africa	66	60 (–06)	81 (21)	15

Source: The Global Findex Database (2021).

During the period 2014–2021, Russia emerged as the leader in the use of digital payments with 87 per cent use of such payments which has grown by 29 per cent. China showed the highest increase in the use of digital payments at 37 per cent and emerged as runner-up in the use of digital payments with 86 per cent use of digital payments. Digital payments grew by 18 per cent and 15 per cent in Brazil and South Africa, respectively, placing them at 3rd and 4th among BRICS countries. During this period, India’s use of digital payments increased by just 13 per cent and is still the lowest (35 per cent) in the group. The low digital payment usage in India could be due to low account ownership, low internet access, fewer mobile subscriptions and less access to electricity as shown by the infrastructure indicators.

Among the developed nations, in 2021, Iceland and Denmark have been making 100 per cent of their payments by using digital payments, followed by Norway, Australia, Sweden, Germany and the Netherlands with 99 per cent usage of digital payments. The Central Bank of Iceland states that digital payments in Iceland have been facilitated by the Fast Payment System (FPS) initiative. Denmark’s National Bank reported that the digital behaviour of senior citizens has made Denmark one of the most digitalised countries in the world. The significant gap between the countries with the highest use of digital payments and BRICS countries shows enormous scope for growth of digital payments in BRICS countries.

III. Implications

The access indicator of Account Ownership in BRICS countries is near to account ownership status in developed countries, whereas in case of Mobile Money Account Ownership, BRICS countries are far behind the countries with the highest Mobile Money Account Ownership, which requires the respective governments and central banks of BRICS countries to take necessary steps to promote Mobile Money Account Ownership. Regarding the use indicators, there exists a significant gap between the BRICS countries and the countries with the highest mobile money account usage, card usage and digital payments, which also requires the intervention of respective governments and central banks of BRICS countries to invest heavily in the expedition of mobile account usage, card usage and digital payments usage.

The regulatory and supervisory frameworks in BRICS countries are undergoing significant changes and technological innovations to achieve the goal of digital financial inclusion. BRICS countries are consistently undertaking measures to reduce unequal access of financial services to the underserved and unserved population. Amongst BRICS countries, efforts are being made to deepen and broaden the reach of digital financial services through expanding access to technology, promoting online–offline integration, imparting knowledge about digital financial literacy and designing appropriate financial services that meet the needs of consumers. There is also a need to prioritise customer data protection and privacy to strengthen the trust of people towards the adoption of digital financial system. BRICS countries also need to work relentlessly on the consumer redressal front (BRICS Digital Financial Inclusion Report, 2021).

Despite intense efforts being made by the Indian Government to shift the economy from cash to digital economy, several factors, such as the majority of Indian citizens living in rural areas, low literacy rate (76 per cent), cyber security issues, significant percentage (12.92 per cent) of people living below the poverty line, frauds, high propensity to evade tax, lack of proper infrastructure, such as less supply of electricity in remote areas, poor connectivity and low quality of internet, are inhibiting the desired digitalisation (Bansal, 2017; Goswami et al., 2021; Trivedi & Sanchiher, 2023) and thus, the Indian goal of digitalisation comparable with the developed countries seems unachievable in the near future.

IV. Limitations

The present study is a descriptive and secondary data-based study in which the digital payment trends among only the BRICS countries are analysed for a limited time period from 2011 to 2021.

V. Conclusion

The digital payment transformations are gradually helping the achievement of the financial inclusion goal in unserved and underserved economies, including the BRICS countries. These countries need to learn and align their financial inclusion strategies with the global leader countries and their peer group countries (BRICS Digital Financial Inclusion Report, 2021). The respective governments and central banks of BRICS countries need to work in close collaboration to provide a safe and secure payment environment, perform rapid redressal of complaints related to online frauds, and ensure active participation of the citizens in the adoption of digital payment instruments; only then the goal of financial inclusion, particularly the digital financial inclusion, can be achieved.

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

ORCID iD

Prabhjot Kaur

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