Amid the rising digitalisation, India’s digital payments market is expected to more than triple from $3 trillion to $10 trillion by 2026, according to a report by PhonePe and Boston Consulting Group. It indicates that India also has one of the fastest-growing fintech landscapes in the world, driven primarily by the advancement in digital payments segment.
Reasons for Faster Digital Payments Growth
Subhrangshu Kumar Neogi, co-founder and executive director of Escrowpay, said, “India’s digital payments landscape has experienced explosive growth in recent years, driven by a convergence of factors including a quickly growing middle class, government initiatives encouraging digital payments, and the widespread use of smartphones. The market is anticipated to continue growing and is expected to triple in size to reach $10 trillion by 2026.”
Growing Accessibility and Availability of Digital Payment Methods: He added that the growing accessibility and availability of digital payment methods in India are one of the major factors behind this expansion. Consumers have a wide choice of alternatives when making digital transactions, from mobile wallets to UPI-based payment systems. This is further helped by the government’s efforts to promote a cashless society, with programmes like demonetisation and the installation of the GST encouraging online transactions.
Expansion of E-Commerce: The expansion of e-commerce in India is another factor boosting the market for digital payments. The demand for safe and practical payment methods has increased as more and more customers are shopping online.
“Digital payment platforms like Escrow are becoming more and more popular in the Indian market since they give buyers and sellers a secure and dependable means to interact online. Overall, a rapidly growing consumer base, government assistance, and a flourishing e-commerce industry make India a top market for digital payments with tremendous future growth potential,” Neogi.
Widely Available Payment Methods and Platforms: India’s digital payments landscape has witnessed phenomenal growth and the adoption of digital payments by the tier-2 and tier-3 cities has been a game changer, according to Amit Kumar, chief technology officer of Easebuzz.
“One of the key reasons for the sharp growth of online customers is mainly because of the widely available payment methods and platforms, such as UPI, credit cards, debit cards, netbanking, wallets, Buy-Now-Pay-Later, EMI, etc. Similarly, the availability of cheaper data and affordable smartphones have also led to the rise of digital payments,” Kumar added.
“Some of the other factors driving the growth of digital payments market in India are easy-to-use payment solutions, digital awareness programmes, supporting policies from the government. Measures like OTP based authentication, card tokenisation etc have helped in uplifting the consumer’s trust in digital payments,” Kumar said.
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