Indian digital payments industry likely to triple to $10 trillion by 2026: Report
Digital payments will account for two out of every three payment transactions by 2026, with contributions from all over India, as per the PhonePe-BCG report.
FollowIndia's digital payments market is at a tipping point and is likely to increase more than triple to USD 10 trillion by 2026, as per the joint report by PhonePe and Boston Consulting Group.
Following the report, digital payments will account for two out of every three payment transactions by 2026, with contributions from all over India. Over the last five years, the digital payments sector has grown incredibly.
Leading global and Indian fintech players have been key drivers of UPI adoption among end-users in India, aided by merchants with user-friendly transaction interfaces and innovative offerings backed by an open API ecosystem.
The PhonePe-BCG report also identifies the growth levers for digital payments in India, including simplified customer onboarding, continued consumer awareness campaigns, merchants having greater access to credit, expanding merchant acceptance, infrastructure upgrades, and the establishment of a financial services marketplace to drive growth in underserved areas.
It also discusses how IoT, 5G, and CBDC will provide additional impetus to growth.
Head of the strategy, and investor relations, PhonePe, Karthik Raghupathy, stated, "We have seen the growth of UPI in recent years." Not surprisingly, UPI has seen a ninefold increase in transaction volume over the last three years, rising from five billion transactions in FY19 to approximately 46 billion transactions in FY22, accounting for more than 60% of non-cash transaction volumes in FY22."
As per Raghupathy, this shows that digital payments have truly gained widespread acceptance throughout the country.
"While tier I-II cities have seen widespread acceptance of digital payments, penetration in tier III-VI cities shows room for expansion." The next wave of growth will now come from tier III-VI cities, as evidenced by the fact that tier III-VI cities have contributed nearly 60-70 per cent of new PhonePe customers over the last two years," Raghupathy concluded.
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