Sep 20, 2024
By: Prerna Tyagi
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India’s digital payments landscape has witnessed remarkable growth over the past decade, becoming a global model for digital adoption. A recent PwC report explores key insights into this evolution, highlighting the expanding digital payments ecosystem, innovations in payment methods, and changing regulatory landscapes.
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India's digital payments industry has experienced a remarkable year-on-year growth of 42% in transaction volume for FY 2023-24, projected to triple by FY 2028-29.
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The Unified Payments Interface (UPI) has become a leading payment method, accounting for over 80% of retail digital payments in India, with transaction volumes expected to reach 439 billion by FY 2028-29.
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The credit card sector is witnessing significant growth, with over 16 million new cards added in FY 2023-24, crossing the milestone of 100 million total cards in force and projected to reach 200 million by FY 2028-29.
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Offline and online merchant-acquiring-solutions like QR codes and payment aggregators grew by over 25% YoY. Innovations such as soundboxes and QR codes are improving merchant payment solutions, contributing to a more robust infrastructure for both online and offline transactions.
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BBPS has seen a growth of 25%, driven by the addition of new billers and increased payment options through third-party applications.
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The Payments Infrastructure Development Fund (PIDF) has accelerated the growth of payment infrastructure across urban and rural areas, facilitating greater access to digital payment methods.
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The Reserve Bank of India is exploring biometric authentication methods (like fingerprints and face IDs) for UPI transactions to enhance security and reduce fraud risks.
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The Reserve Bank of India (RBI) and NPCI International Payments are pursuing partnerships to expand UPI's international presence. This includes integrating UPI into various countries to facilitate cross-border transactions, enhancing user convenience and promoting tourism, notably through a prepaid wallet launched for G20 visitors during the recent summit.
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The integration of UPI with credit cards has significantly increased transaction frequency, with users averaging 21 UPI transactions per month—four times more than traditional credit card usage. This has led to a remarkable 233% growth in the RuPay credit card market share during FY 2023-24, driven by enhanced adoption and convenience.
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