Will UPI cash deposit facility render debit cards irrelevant?

livemint.com:

debit cards for payments has remained stagnant during the timeframe, RBI data showed. RBI’s latest decision to enable cash deposit facility through UPI at ATMs will only hasten the process of a complete switch from card-based transactions to fully mobile/ digital payments, according to top officials in digital payments infrastructure business. With this announcement, customers no longer have to carry their debit cards for depositing cash at the CDMs (cash deposit machines).

Customers can now withdraw money from ATMs through UPIs in a simple process. Cash deposits through UPIs would be similar to cash withdrawal, say experts. Payments using mobile phones have jumped from around ₹150 lakh crore in 2021-22 to about ₹307 lakh crore in 2023-24.

But payments made with debit cards remained stagnant hovering between ₹31 lakh crore and ₹32.9 lakh crore during the last three years. Debit cards started making their mark in India at the turn of the millennium. With ATM becoming more common, their usage has increased exponentially in the last 25 years.

There are over 1 billion debit cards in usage in the country now. “With this move from the RBI, the debit card journey will come to a complete halt and it might only be used in international transactions for the next few years," said Atish Shelar, Chief Operating Officer, TechFini, a Mumbai-based fintech firm providing payment infrastructure solutions in association with NPCI (National Payments Corporation of India). “The need to carry a plastic card has come down for low value transactions," said Rahul Jain, Chief Financial Officer, NTT Data Payment Services India, a leading payments solutions provider.