Digital Payments Market in India will Triple to $10 Trillion by 2026
According to the most recent study by India’s digital payments market will more than triple to $10 Trillion by 2026. digital payments Firm PhonePe And Boston Consulting Group (BCG).
According to the study, 40% of Indian transactions are now digital. In 2021, $3 trillion in payments were made using digital instruments. This excludes payments for financial services, corporate payments, or government payments.
India’s Unified Payments Interface (UPI) The number of transactions in keeps growing, with 5.95 billion transactions totalling Rs 10.41 lakh crore.
India’s Free Payment Link Generator
PhonePe-BCG’s study found that UPI has significantly accelerated India’s transition from cash payments to non-cash, particularly in person-to–person (P2P), and low-value merchants (P2M), payments.
According to the report, UPI saw a ninefold increase in transaction volume over the last three years, from five million transactions in FY19, to 46 billion in FY22. This account accounted for more than 60% non-cash transaction volumes.
According to the study, UPI has room for growth and will account in 73% of all digital payments volumes by FY26.
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According to the report, QR codes and quick response (QR), have been a major factor in expanding digital payment services in India. QR-code payments are now accepted by more than 30,000,000 merchants in India, which is a significant increase on the 2.5 million merchants that were accepted five years ago.
With QR-code adoption growing, total UPI transaction volumes have risen from 12% to 45% in 2018, and are expected to grow further, it said.
According to the report, “The main contributor to the growth of digital payments would be merchant payments. They are expected to significantly digitize over the next five year, increasing from 20% digital penetration today to around 65% by 2026. This will result in a sevenfold increase from $0.3–0.4 trillion digital Merchant payments today to $2.5–2.7 trillion by 2026.”
The report stated that offline payments will account for 75% in digital payment transactions over the next few years as more stores adopt QR codes.
India’s Free UPI Payment Link Generator
The report identified know-your-customer (KYC), frauds, and UPI outages among the possible obstacles to digital payment acceptance.
“Currently, KYC is a major bottleneck that discourages merchants from signing up to digital platforms and ewallets. Although digital KYC can be used to refer to OKYC (offline KYC), VKYC(video KYC), many players have difficulty completing end-to-end digital KYC. Full KYC requires either video or a physical touchpoint with a biometric device,” said the report.
It was also stated that technical declines continue plague the high-growth UPI ecosystem due to bank infrastructure scaling issues.
“Banks and NPCI (National Payments Corporation of India), which manages UPI, experience about 1.4% of technical drops in UPI transaction volume due to network problems and unavailability. This is despite the extraordinary growth of UPI. There is little room for improvement in service quality and scalability on banking platforms. The report stated that banks need to find solutions by looking at alternatives, such as cloud banking.
