Digital payment in India is witnessing phenomenal growth with a compound annual growth rate (CAGR) of 12.7 per cent in the number of non-cash transactions, according to a KPMG report, which also added that the global digital payments market size is expected to touch USD 10.07 trillion by 2026.
The growth is attributed to developing markets led by emerging Asian countries, which are forecasted to grow by 28.8 per cent till 2024(number of non-cash transactions), and expected to account for half of the digital transactions worldwide, said KPMG.
India is forecasted to see the fastest growth in digital payments transaction value between 2019 and 2023, with a CAGR of 20.2 per cent, ahead of China and the United States. The evolution of digital payments in India is attributed to the progressive thought process of Reserve Bank of India (RBI), central and state governments, industry associations and payment enterprises, said the report.
The key drivers for mobile payments in India have been positive policy framework changes and government initiatives like launch of new payments systems such as UPI, Aadhaar-linked electronic payments and improvement of the digital infrastructure.
The report said that the mobile payment revolution in the country has led to a boom in the number of merchants adopting digital payments with close to 1.5 million digital payment acceptance locations in 2016-17.
The financial services sector today, has undergone a massive shift towards digital. Indian fintech startups making big impact on the market. This shift has meant that new opportunities around digital financial services have opened up. The payments business services have been at the forefront of this digital transformation. The transformation can be attributed to a combination of innovations that include robust infrastructure, evolving customer expectations, progressive government initiatives and policies and technological advancements, the report noted.
“India today is one of the leading countries when it comes to payment transformation. The seamless integration of mobile technology and financial services has paved the way for increased digital adoption,” Manish Jain, Partner, Digital and Fintech, Management Consulting, KPMG in India said, commenting on the report.
According to him, what is made this possible is proactive participation from all the key stakeholders involved here- i.e. government, regulators, banks and financial institutions, merchants, mobile payments service providers, and investors who today have become a key enabler to leverage the mobile payments ecosystem.