India Likely To Contribute 2.2 Percentage Of Global Digital Payment Market By 2023
The digital India initiative, boosted by the rapid adoption of mobile-based real-time Unified Payments Interface (UPI), has established India as one of the fastest-growing digital payment economies of the world. According to a report published by PWC and Payments Council of India (PCI), India is expected to contribute approximately 2.2 per cent of the global digital payment market by 2023.
The report titled 'Empowering payments: Digital India on the path of revolution' said that the global transaction value for digital payment is expected to reach $12 trillion by the year 2025. Since UPI is one of the largest real-time payment systems globally, the report estimates that home-grown platforms shall reach nearly 59 billion transactions in volume by 2023. "Clocking over 1 billion transactions every month, the platform has witnessed a CAGR of 785 per cent in volume and 570 per cent in terms of value from financial year 2017 to 2020," the report further added.
As per the report, India is one of the fastest-growing countries in the sector, showing rapid progression in the transformation of digital payments. The Indian digital payment ecosystem has been attracting investments from private equity firms, as well as, venture capital firms and other international payment companies that are eying to enter the Indian market in the near future. The report has identified India as the leader across several parameters that includes regulation of costs of payment systems, availability of alternative payment systems, the share of e-money in payment systems among many others.
The report further adds, "Emergence of e-commerce players has connected geographically separated businesses with customers across the country. This has prompted customers and businesses to exchange payments digitally. With digitization in the government sector, tax returns, GST payouts and relief packages from the government are being processed electronically, leading to the popularity of digital payments in the country".
The emergence of UPI, QR based merchant payment solutions, Aadhaar enabled payment systems (AePS), National Electronic Toll Connection (NETC), Bharat Bill Payment System (BBPS) and RuPay cards have ensured last mile connectivity to the fullest. The COVID-19 pandemic like situation is expected to further boost-up the reach of digital payments in India. "The consumers' shift to digital channels would enable every business, small or large scale, to embrace digital payments and facilitate financial inclusion at a macro level. The pandemic is also accelerating the transition to online as physical retail stores and businesses have taken a massive hit", the report states.
The report also highlights the importance of collaborative efforts of the government, regulators and payment companies. As the COVID-19 outbreak has significantly increased the uptake of digital payments, the prospects of the digital payment industry look very encouraging indeed.