Image courtesy: PayUMoney
Digital payments in India have grown steadily for several years as banks issued both debit and credit cards to a large chunk of its account holders in the urban landscape. However, it was the launch of the United Payments Interface (UPI) and demonetization that became the inflection point for rapid growth ever since, says a new study.
The study titled “Empowering payments: Digital India on the path of revolution” has been jointly released by PwC and Payments Council of India, a arm of the Internet and Mobile Association of India that represents over 100 players in the payments and settlement systems. It expects the global digital payments market to grow at a CAGR of 23.8% to touch $12.4 trillion in transaction value by 2025.
While digital and mobile wallets contributed 42% of total spending globally, as many as 49 of the countries saw transaction limits on contactless payments grow since the start of the Covid-19 pandemic across the world. Among these, the UPI emerged as the largest real-time payment system, clocking over a billion transactions each month.
While the demonetisation and UPI launch exposed digital payments to a larger section of the society, it was the pandemic and the resultant lockdown that added some heft to the progress that India has made in this field. “Financial inclusion, extensive smartphone adoption, on top of a concerted effort from the government and regulators to push the Digital India campaign has helped mass adoption of mobile-based, real time payment platforms, the report said.
It suggested that the lockdown resulted in an increase in digital payments both at the merchant end though the report doesn’t give any breakup of the numbers during April-June quarter which is when most of India was under various stages of lockdown.
The COVID-19 pandemic has presented a massive opportunity for the digital payments industry to flourish. Consumers and businesses are now preferring various modes of digital payments while transacting. The demand for contactless is increasing and businesses are looking at integrating their online and offline channels to provide an omni-channel experience to its customers.
Organisations are also looking at utilising overlay services such as Request to Pay to provide enhanced customer experience and improve their payments collections. Digital payments in India is also expected to witness the transformations that will be borne out of this pandemic and come out of this stronger than ever, the report said.
