India to contribute 2.2% to global digital payments market by 2023

India is expected to contribute 2.2 percent of the world’s digital payment market by 2023. The global transaction value for digital payments will reach $12.4 trillion by 2025, said a report by Payments Council of India (PCI) and management consulting group PricewaterhouseCoopers (PWC).

The report titled 'Empowering payments: Digital India on the path of revolution' said multiple Indian retail products like UPI, Bharat QR and mobile wallets had ensured last-mile connectivity, covering small merchants, tea-sellers and even hawkers.

The report, released at the Virtual Global Fintech Fest (GFF) 2020 on July 23, estimates that India’s Unified Payments Interface (UPI) platform will reach nearly 59 billion in volume by 2023 due to its high peer-to-peer (P2P) type of transaction penetration. The digital payments market globally is likely to hit $12.4-trillion mark in transaction value by 2025 up from $3.7 trillion in 2019.

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UPI grew from $928 million in FY 2017 to $117 billion in FY 2019 in transaction value. It is likely to further grow to $117 billion by FY 2023 at a CAGR of 228 percent. In terms of volume, it is likely to scale from 5.35 billion in FY19 to 59.77 billion in FY23 at a CAGR of 287 percent, as per a report in Financial Express.

"UPI transactions have been growing ever since its launch. UPI has been proven to be a masterpiece of NPCI, breaking the records year over year," the report said.

It further states that India is one of the fastest-growing countries in the world, showing rapid progression in the transformation of digital payments, largely due to its large population and demographics.

"India's strong position in the digital payments space can be attributed to regulation of costs of payment systems, laws in place, availability of alternate payment systems, the share of electronic money in payment systems, steps taken by the central government, fast payment systems available in the country, volume and growth of e-money among others," the PCI-PwC report said.

The report also stressed upon the impact of the COVID-19 pandemic on the industry. "Owing to the rise in contactless payments, it has become imperative for businesses to offer multiple payment options to consumers combining online and offline channels to provide a seamless experience to their customers," it added.

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