India to clock the fastest growth in digital payments between 2019-2023

There is no denying the fact that
fintech adoption is the need of the hour for the BFSI sector. In fact, a recent Assocham-PWC study indicates a surge in digital payments in India between 2019-2023. According to the joint study, digital payments in India will more than double to $135.2 billion by 2023.

Globally, India’s share of worldwide digital transaction value will increase from current 1.56% to 2.02% over the five-year period. The study reveals, “India is expected to clock the fastest growth in digital payments’ transaction value between 2019 and 2023 with a compounded annual growth of 20.2%.”

The major factors that led to an exponential growth in digital payments in the country include demonetisation and discounts/cashback offers on mobile wallets and UPI transactions. The study also talks about the early success of non-banking companies like Paytm, which was a catalyst in enhancing the digital landscape in India.

The study further observes, “Interoperability is expected to remove such hindrances and enable users to make payments at any and all digitally enabled merchant outlets without the need to possess the same wallet platform. What makes interoperability possible today is the UPI, which allows users possessing accounts in different banks to transact with each other in real time.”

The rise of innovation in digital payments with the help of AI, blockchain, Internet of things (IoT), and mobile point of sales (POS) devices will also contributed to the growth. To encourage the digital payments ecosystem, a Nandan Nilekani-led committee has been setup by the RBI. Among a host of changes, the committee has proposed round the clock RTGS, NEFT facility, and duty-free import of POS machines.