The cashless payments method has been increasing in India. India has reported a steep increase in digital payments surpassing countries like China, the US, and others.
India’s digital payment brands like Paytm, PhonePe, BharatPe, Pine Labs, etc have received a steep increase in users. They also use incentives like cash-backs, rewards, and other offers to lure new users.
India is witness to the highest number of real-time online transactions in 2020 with 25.5 billion real-time payments. It has been followed by:-
- China- 15.7 billion
- South Korea- 6 billion
- Thailand- 5.2 billion
- UK- 2.8 billion
Among the list of 9 countries, the US was placed in place with 1.2 billion transactions. The real-time transaction share for instant payments in India was 15.6% and 22.9% (other electronic payments) in 2020. According to ACI Worldwide, paper-based payments have a major share of 61.4%.
This figure is expected to change in 2025 as the share for instant payments and other e- payments will be 37.1% & 34.6%. However, the paper-based transaction will shrink to 28.3%. While the share of real-time payments in electronic transactions will reach 50% by 2024.
India’s journey for building a digital financial infrastructure has been a collaborative effort among the government, regulator, banks, fintech.
This has contributed to the development of rapid payments in digital mode amongst citizens. India’s digital payment companies like Paytm, Phonepe, Bharat Pe, Pine labs, etc. have managed to lure new customers.
The government’s policy frameworks like PPI (prepaid instruments) UPI (Universal Payment Interface) and the launch of the BHIM app have fueled the payment acceptance infrastructure of India in recent years.
The Pandemic has caused a big growth in the use of digital payment methods. It has been further boost by new companies in payment infrastructure, innovations in technology, initiatives by companies for customer satisfaction, and regulatory changes.
The pandemic has contributed to change in the behaviors of consumers, businesses, banks, merchants, and intermediaries in the ecosystem. The priority has been laid on a transformation to digital for protecting the ongoing revenue systems and looking for new ones in fully digitalized customer experience.
Other countries like Brazil, Mexico, and Malaysia that have been conventionally dependent on cash are now the fastest adopters of digital payment methods. India as a country has been growing faster than others in the world of cashless payments. This transformation has brought a new post of brands supported by foreign brands. India’s shift to digitalization has not been a straight road.
The Government of India suddenly banned particular banknotes in 2016. This policy came as a shock to the country that created a cash shortage. But, consumers quickly returned the cash.
India as a nation has all the traits that contribute to the growth of digital payments. It has a big chunk of the population of mobile users that ardently use technology. On the other hand, the population has not been treated convincingly by the existing bank.
Since then, cashless payments have gained a good pace. India has more than 10 million locations that have the facility of digital payments. Online payments have also been strengthened by Unified Payments Interface (UPI) which enables payments among bank accounts.
Globally, digital translations have taken up cash methods and the payments brands in India have become a part of the fastest-growing companies in India.
India has 45 mobile wallet provider companies. Furthermore, there are 50 UPI-based payment providers. Just as new payment methods have grown in India, competition has also emerged between the cashless payments provider companies in India.
Sources:-
https://qz.com/india/1746910/cashless-payments-growing-faster-in-india-than-almost-anywhere-else/
