Digital payments in India will overtake cash and non-digital payments by 2022, according to a report from market research firm International Data Corporation.
Next-generation payment structures, such as mobile wallets, payments banks, BharatQR and electronic authentication are instrumental in enhancing digital payment volume in the country, the report said.
“The payment industry in India is going through gigantic changes. Over the last few years, the tremendous growth in the digital payment space has elicited a passionate debate across the industry. The next several years will see a transformation of how consumers, businesses and the government move money," said Anuj Agrawal, senior research manager, IDC Financial Insights.
According to the report—which shows spectacular growth of non-cash, digital payments in the once hard-to-crack market and highlights the key trends in the digital payment space and their impact on the payment industry—usage (number of transactions) of digital payment instruments has seen a tremendous improvement year over year versus traditional non-digital channels (excluding cash).
The contribution of digital payment instruments such as retail electronic clearing, mWallet and mobile banking means the volume of transactions already doubled in 2016–17 and is expected to grow further from 32% in 2013–14 to 62% in 2017–18, the report said.
Further, the percentage of transactions at POS will overtake the transactions at ATMs—both in terms of volume and value—by 2022, it said.
According to RBI data, nearly 965 million digital transactions were recorded in October, making it the highest ever in a month since the government's demonetisation exercise.
Transactions on the UPI platform rose by 150% to 76.8 million compared to 30.8 million in September. In terms of value, UPI transactions rose 33% to Rs 7,028 crore in October from Rs 5,293 crore in September.
Usage of PPIs also showed an increase in terms of both value and volume. Transactions by volume rose 10% to 96.2 million in October from 87.5 million in September.
PoS transactions also grew by 6.4% and 11% in terms of volume and value respectively, according to RBI data.
Credit and debit cards, the unified payments interface (UPI), unstructured supplementary service data (USSD), prepaid payment instruments (PPIs) and internet banking are included in the digital payments basket.