New Delhi: Digital payments in India are expected to triple to Rs 7.092 trillion by 2025 on account of government policies around financial inclusion and increasing digitisation of merchants, according to a research report. RedSeer Consulting said in its report that the country's digital payments market was valued at around Rs 2,162 trillion in 2019-20.
"The current 160 million unique mobile payment users will multiply by five times, to reach 800 million in 2025. This growth will be attributed to a number of demand and supply-side drivers," said the Bengaluru-based management consultancy.
"Mobile payments will drive around 3.5 percent of total digital payments of Rs 7,092 trillion by the financial year 2025, up from 1 percent today. Total mobile payment users, currently stand at about 162 million, would reach about 800 million during this period,” the report said.
According to the report, wallets will continue to play a significant role in its growth with the continued increase in both frequency and user base.
By 2025, it said, the wallets are expected to have higher penetration and lower-income would eventually lead to many small transactions.
RedSeer, which serves several e-commerce companies and venture capitalists, including Tiger Global, estimates that the growth in digital payments will come specifically through increased penetration with unconnected merchants and that penetration will grow with the non-connected retail sector. organized thanks to greater digitization of merchants in cities than Surpassing the second level.
Redseer sees COVID-19 as a catalyst for digital payments across India.
"COVID-19 appears to be another similar catalyst to the cancellation of circulation in the industry. Digital payment providers have been very practical in terms of responding to this situation, providing better support for basic concepts such as offering groceries, masks, sanitisers, and COVID-19 insurance, offering integration with donations for PM Fund and other basic products and services," RedSeer Consulting founder and CEO Anil Kumar said.
According to RedSeer, the share of digital payments from grocery stores increased to 75 percent due to COVID-19, as people preferred to pay via mobile phone due to security concerns.
"There is a lot of room for the growth of EDC (Electronic Data Capture) terminals in the world of small retail stores. Large and medium-sized retailers use more than two EDC terminals. Today we have around 5 million stations, which is almost 5 times more than in the financial field in 2015 ".
According to the report, the payment gateway complex market in India, currently estimated at Rs 9.5 trillion, is expected to grow 2.4 times driven by high-value transactions. It is projected to grow at a compound annual growth rate of 19 percent over the next five years to reach Rs 22.6 trillion by FY 2025.
"The payment gateway market today is extremely competitive and all major players are fighting for market share. Paytm leads this pack and is the fastest-growing, followed by BillDesk with marquee government clients," the report said.
Source: Your Story
Also Read: Nokia launches new Media Streamer to rival Amazon Fire TV Stick