The global digital payment market is estimated to grow at 23.8% CAGR in the next five years to become a $12.4 trillion market by 2025. India, one of the fastest-growing internet and smartphone markets in the world, will play a vital role in the phenomenal growth and would account for a sizeable 2.2% of the market by 2023.
According to the latest report, titled Empowering payments: Digital India on the path of revolution, which is launched at Global Fintech Fest 2020, both developed and developing markets are going through a digital payment revolution currently. Consumers are adopting one or multiple digital payment systems at a much faster rate than ever before.
The report highlights that digital payment revolution worldwide is primarily led by the exploded adoption of digital and mobile wallets, which accounted for 49% of the total spending globally.
In India, however, the scenario is a bit different as after the initial traction created by mobile wallets, the market quickly moved from wallet to UPI payment which has emerged as the largest real-time payment system in the world today. With over 1 billion transactions per month currently, UPI payments is expected to clock the highest growth rate in the next few years, reaching 59 billion transactions by 2023.
Between FY’2017 and FY’2020, the UPI payments grew at CAGR of 785% and 570% in terms of volume and value, respectively. The exponential growth rate of UPI payments indicates the changing market conditions in India – the country which has historically been a cash-based economy.
The exploded adoption of digital payment systems has helped the fintech market in India to attract the eyeballs of global investors and entrepreneurs.
Dazeinfo earlier reported about the overall growth of digital transactions in India, which is clocking nearly 100 million transactions per day. The unprecedented growth rate of digital payments – driven by the increasing penetration of smartphones and 4G adoption – will lead to 1.5 billion daily digital transactions in India 2023.
The latest GFF report identifies India as a leader across parameters – regulation of costs of payment systems, laws in place, availability of alternate payment systems, share of e-money in payment systems, oversight by the Central Government, fast payment systems available in the country, volume and growth of e-money, etc.
