Monday, September 26, 2022

India’s digital payments market will triple to $10 trillion by 2026

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India’s digital payment market is expected to more than triple to $10 trillion by 2026, according to the latest study by digital payments firm PhonePe and Boston Consulting Group (BCG).

At present, the study said, 40% of all transactions in India are digital, and payments worth $3 trillion were processed by digital instruments in 2021.

UPI Graphic

India’s Unified Payments Interface (UPI) continues to grow, clocking 5.95 billion transactions worth Rs 10.41 lakh crore last month.

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According to the PhonePe-BCG study, UPI has supercharged India’s transition to non-cash payments, especially in person-to-person (P2P) fund transfers and low-value merchant (P2M) payments.

The study said UPI still has headroom to grow and will account for 73% of all digital payment volumes by FY26.

In terms of acceptance, quick response (QR) codes have played a big part in expaning digital payment services in India, the report said. At present, QR-code payments are accepted by more than 30 million merchants in the country, a substantial increase from 2.5 million merchants five years ago.

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As QR-code adoption grows, total P2M transaction volumes on UPI have grown from 12% in 2018 to 45% in 2021, with further growth expected.

Offline payments are expected to account for 75% of all digital payment transactions in the coming years, as more stores adopt QR codes.

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