By 2030, cashless transactions are set to jump by 200%, marking a big change in how we pay. This shift is bringing in a new era of digital finance and automated payments. It’s all thanks to contactless payments, mobile wallets, and FinTech companies.
In India, digital payments have grown a lot, with a 45 percent growth rate from FY 2017-18 to FY 2022-23. By FY 2023-24, the total digital payment transactions hit over 11,000 crores. Also, UPI transactions grew by 56 percent from July to December 2023, reaching 65.7 billion transactions.
Key Takeaways
- The digital payment landscape in India is undergoing a transformative shift, driven by the rise of contactless transactions and mobile wallets.
- Peer-to-Peer (P2P) payment platforms are revolutionising the way individuals and businesses exchange value, with the global P2P payments market size projected to reach USD 8,078.81 billion by 2030.
- Buy-Now-Pay-Later (BNPL) solutions are reshaping consumer finance, with the BNPL Gross Merchandise Value in India expected to reach USD 26.1 billion by 2028.
- Cryptocurrencies and blockchain technology are disrupting cross-border transactions, with over 12,000 cryptocurrencies currently in the market.
- Central Bank Digital Currencies (CBDCs) are emerging as a novel development in the global payment landscape, offering advantages such as reduced risk and simplified record-keeping.
The Rise of Contactless and Mobile Wallet Transactions
India’s financial scene is changing fast, thanks to the quick rise of contactless and mobile wallet payments. New tech has made paying easy, safe, and without touching things. This is making both customers and businesses happy.
Contactless transactions are getting more popular because of mobile wallets like Ongo, Paytm, PhonePe, and Google Pay. These apps use NFC (Near Field Communication) technology. Now, people can pay with just a tap of their phones.
Factual Data on Contactless Transactions Growth
A report by The Times of India (TOI) Tech desk shows a big jump in UPI transactions from July to December 2023. There were 65.7 billion transactions, up from 42.1 billion the year before. This shows more people are choosing cashless payments and using contactless cards and mobile wallets.
Businesses are also seeing the perks of contactless payments. They make transactions quicker and customers happier. For example, AGS Transact Technologies teamed up with a big OMC to test a new contactless fueling solution on the Ongo app. This shows how fintech is moving forward.
Even though contactless transactions are growing, there are still hurdles like getting ready for them and following rules. But these problems also mean more chances for working together and coming up with new ideas in fintech. This could lead to a more exciting and safe way of paying in the future.
Peer-to-Peer Payment Platforms Transforming Transactions
Peer-to-Peer (P2P) payment apps like Venmo and PayPal have changed how we handle money in India. They let users send money directly to each other, skipping traditional banks. This is great for personal use, like paying bills or giving gifts to friends. For businesses, they offer a quick and safe way to get paid, helping small businesses and freelancers manage their money better.
Now, almost half of all US transactions in 2023 were through P2P services. The global market for P2P payments is expected to hit $9 billion by 2030. This shows how big an impact these digital payment platforms have had. PayPal, for example, has over 400 million users worldwide, proving the demand for easy P2P Payments.
P2P apps have made managing money easier and more connected. They’ve changed how we handle our finances, making transactions smooth and linking to social media. As digital payments grow, P2P platforms are set to lead the future of transactions.
“The rise of P2P payment apps has truly transformed transactions, making them more convenient, secure, and socially integrated than ever before.”
Digital Payments: Driving Financial Inclusion
The growth of digital payments in India is changing the game for financial inclusion. It’s making sure everyone has access to financial services, especially those who were left behind. As cash use drops, the focus shifts to digital payments. This shift is key to economic growth, and everyone from governments to banks is pushing for more inclusion.
Market Growth for P2P Payments
The P2P payments market is booming, set to hit USD 8,078.81 billion by 2030. It’s growing at a rate of 17.53 percent each year from 2022 to 2030. This growth is helping more people get into the financial system.
Worldwide, the use of digital payments has soared, especially in emerging markets. From 2014 to 2021, the number of adults using digital payments jumped from 35% to 57%. The BIS found that more digital payments lead to faster economic growth and higher GDP per capita in many countries from 2014 to 2019.
Buy-Now-Pay-Later: Reshaping Consumer Finance
Buy-Now-Pay-Later (BNPL) services have changed how people in India buy things and pay for them. These Fintech solutions let customers get products right away and pay for them later in easy instalments. Often, there’s no interest or fees if payments are made on time.
BNPL is now used both online and offline, making it a common way to pay for many products and services. Its ease and Instant Gratification have made it more popular. But, this has also raised worries about how well people understand finance and the need for Regulatory Scrutiny on these Consumer Finance options.
A recent study found that BNPL’s value in India will jump from USD 12.2 billion in 2022 to USD 26.1 billion by 2028. This shows how big an impact Buy-Now-Pay-Later is having on Indian consumers. More people are choosing it for its convenience and Flexible Payments.
| Statistic | Value |
|---|---|
| Reduction in Cart Abandonment Rates for Retailers using BNPL | 25% |
| BNPL Utilization Growth in Corporate Buying | 15% Annually |
| Digital Wallet Adoption Growth Rate in APAC | 30% Per Year |
| Increase in User Engagement for Digital Wallets with Loyalty Programs | 40% |
The growth of Buy-Now-Pay-Later services is changing how Indians buy and manage money. Its popularity and effects on the finance industry show it’s key to the future of buying and consumer habits in India.
Cryptocurrencies and Blockchain: Transforming Cross-Border Transactions
Cryptocurrencies are changing how we make transactions, especially across borders. They use blockchain technology for secure and efficient payments. This system is like a digital ledger that keeps track of transactions without needing banks.
This new way of transferring money is direct and easy to use. But, it can be risky because of changing exchange rates. This could lead to unexpected costs. Despite this, more people are getting into cryptocurrencies, with India being a big player.
The market for sending money across borders is set to grow to $290 trillion by 2030. In 2022, blockchain made up 44% of global payments revenue. The crypto payment market is expected to hit $5.4 billion by 2031, with more businesses using blockchain for international payments.
Stablecoins, tied to real assets like the US dollar, have a huge market value. They’re used in over $40 billion in trades every day. By 2022, they even beat the volumes of big card networks like Mastercard.
Central Bank Digital Currencies (CBDCs) are also changing the game. Over 100 central banks are working on them. Companies like Visa and Stripe are exploring stablecoins for global payments.
As the world connects more, we need better ways to pay across borders, even on weekends. Blockchain can make international payments faster, more reliable, and cheaper. This could be a big change for how we handle cross-border transactions.
“Blockchain technology has the potential to support near-instantaneous transactions and automate complexity.”
Conclusion
India’s digital payment scene is changing fast, with more people using contactless payments and mobile wallets. Platforms for paying each other directly, buy-now-pay-later services, and new tech like cryptocurrencies are making things easier. This change is helping more people and businesses join the digital world.
Payments in India have grown a lot, from Rs. 2,070 billion in 2016 to Rs. 8,207 billion in 2019. That’s a 294% increase over three years. UPI transactions have also soared, from 0.9 billion in 2017 to 22.3 billion in 2021. This shows a huge growth rate of 213.7% each year. Also, the number of fintech startups has jumped from 737 in 2014 to 2,874 in 2020, showing lots of innovation and investment.
As these changes keep happening, it’s important for everyone to understand the benefits and challenges. A strong set of rules will help balance new ideas with keeping customers safe. India is leading the way in digital payments, making its financial world more modern.