We had dealt with exponential increases on this blog once before. We revisit the topic, and this time this is in the context of the inter bank mobile payment system that came into place sometime last year. I’ve never used it so I’m not sure how it works, but going by the data put out by the National Payments Corporation of India, the volume of transactions is increasing at an exponential rate.
How do we determine this is an exponential rate? First, let us look at the time series of total volumes of transactions:
Notice that after remaining flat for a couple of months (maybe even decreasing) the number of transactions has really taken off (March is probably an aberration – but given that it’s the month of financial closure the higher volumes can be expected). Increased exponentially, you say? How can we test that?
We can test that by using a logarithmic scale for the y-axis. Here is the same plot again, except that this time the Y-axis is logarithmic.
Notice that apart from the part with the aberration and the initial two months, the graph is now linear. In other words, we can describe this graph by a line of the form
log y = a + b x
or y = exp (a + bx)
Coming back from the geekery, it is really good to note that IMPS has taken off. However, this should not be taken as proof of the fact that mobile payments are easy, for IMPS is anything but easy. New RBI Governor Raghuram Rajan has said in his inaugural speech that he hopes to make it simpler to make payments via mobile. Hopefully this will take off soon. Till then all we can do is to contribute to the exponential growth in the update of the IMPS!