India’s digital payment transactions are expected to jump 268% to 217 billion in the financial year ending 2026, from this fiscal’s figure of 59 billion, a new report has projected.
The country’s fintech market is likely to expand to $1.30 trillion (nearly 100 lakh crore rupees) by 2025, according to the report by PwC India. In 2021, the Asia-Pacific region, including India, China, South Korea, and Thailand, grabbed the largest share of real-time payment transactions, it said.
While India‘s unified payments interface (UPI) remains a major contributor, customers are also increasingly adopting the buy-now-pay-later model for payments. The latter facilitates small-ticket credit-based transactions and is currently estimated at Rs36,300 crore. It may reach Rs3.19 lakh crore by the end of 2025-26.
“We expect the payments industry to focus heavily on enhancing customer experience and providing customer options for payment, enhancing security, undertaking innovations in technology like distributed ledger technology and emerging tech like IoT (internet of things) over the next couple of years,” Mihir Gandhi, partner and payments transformation leader at PwC India said.
Besides using UPI for toll tax collection and cross-border remittances, the tokenisation of cards, offline payments, e-RUPI, and digital currency, too, will bolster the sector.
“We are observing accelerated acceptance and adoption of UPI for everyday shopping, bill payments, money transfer, and more from tier-2 and -3 cities,” Mahendra Nerurkar, CEO and VP of Amazon Pay India said.
The Reserve Bank of India, meanwhile, has also been working on its digital currency, which may further facilitate retail payments. For cross-border remittances, though, central banks will have to collaborate and develop a multilateral model similar to the existing remittance networks worldwide.