India is forecasted to see the fastest growth in digital payments transaction value between 2019 and 2023
New Delhi, August 29: Keeping pace with the government’s push for digital payments in India, mobile payments are showing greater opportunities in the country and the key drivers for mobile payments 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, revealed a report by KPMG in India.
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.
The report said RBI has endeavoured to ensure that India has state of art payment systems, which are secure, efficient, fast and affordable.
“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. What has made this possible is proactive participation from all the key stakeholders involved here, that is, government, regulators, banks and financial institutions, merchants, mobile payments service providers, and investors, who today have become key enablers to leverage the mobile payments ecosystem,” said Manish Jain, Partner, Digital and Fintech, Management Consulting, KPMG in India.
The global digital payments market size is expected to touch $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.
The digital payments landscape is being driven by compelling value propositions, conducive infrastructure, supportive regulations and next generation technologies.
The report aims to offer a thorough view of the global mobile payments ecosystems and themes, thereby drawing key learnings, addressing opportunities and challenges for the Indian mobile payments ecosystem.
Over the past two decades in India, technology developments and evolution of device form factors have led to a gradual transformation of digital payments. While feature phones are limited to Unstructured Supplementary Services Data, the advent of smartphones and the internet has opened up a host of form factors and access to payment technologies.
“The mobile payment revolution with its evolving form factors has led to a boom in the number of merchants adopting digital payments. From close to 1.5 million digital payment acceptance locations in 2016-17, the number of merchants accepting digital payments modes has increased to over 10 million, in a short span of two to three years,” the report said.
The change in the payment landscape has accelerated over the last decade, with multiple factors redefining the traditional role of banks and creating a mature landscape. India’s payments landscape is growing faster than the global average. Some of the factors pushing growth include emergence of mobile payments service providers, evolving business services by the market incumbents, inclusive government policies and literacy programmes, robust payments infrastructure, high consumer acceptance and regulatory support.