Over the past five years, the digital payments ecosystem in India has experienced amazing growth. Based on the most recent research from digital payments company PhonePe and Boston Consulting Group (BCG), India’s market for digital payments is at a turning point and is anticipated to more than triple from its present value of US$3 trillion to US$10 trillion by 2026. By 2026, digital payments (non-cash) will account for 2 out of 3 payment transactions as a result of this exceptional development.
UPI a Game Changer
In India now, 40% of all transactions are digital, and in 2021, $3 trillion in payments were handled by digital means. Government payments, corporate payments, and payments for financial services are not included in this. The research also discusses how the introduction of numerous new firms with a variety of offers has positively disrupted the ecosystem for digital payments, promoting their widespread acceptance. The development of a sizable merchant acceptance network based on QR codes has assisted in the adoption of UPI among end users in India by prominent international and Indian fintech businesses.
Market Share Of Digital Payment
According to the research, PhonePe has a 46 percent market share, Google Pay has a 34 percent share, Paytm has a 14 percent share, and other Banks and TPAPs have a 6 percent share.
Reasons for such growth
In just two to three years, the number of shops accepting digital payment methods has surged from over 1.5 million locations in 2016–17 to over 10 million places.
- Increased awareness
Since demonetization in November 2016, especially, consumer acceptance of digital payment methods has soared. Consumers in the Millennial and Gen Z generations are accustomed to and frequently utilise digital payments. Merchants will lose out on a sizable portion of business if they do not accept digital payments.
- New policies
Nirmala Sitharaman, India’s finance minister, had proposed that businesses with an annual revenue of more than 50 crore should allow customers to pay with low-cost digital methods like BHIM UPI, Aadhaar Pay, UPI-QR Code, debit cards, NEFT, and RTGS, with no fees or Merchant Discount Rate (MDR) imposed on either consumers or businesses. This idea is now a part of the law as of November 1 as a result of the Finance Bill’s passage.
- New Technology
The financial sector in India will only get stronger with the entrance of cutting-edge technologies. By incorporating quick, safe, dependable, and scalable technology ourselves, we have been able to show enhanced ROI for our merchant customers.
