Digital Payments in India to increase to 1 trillion by 2023

By Ridhima Malhotra 

Global financial services company Credit Suisse reports that Digital Payments in India are projected to rise fivefold in the next five years and will reach $1 trillion.

 Entry of global players like Google, Facebook and WhatsApp is likely to cause a major increase in the digital payments market.Google's digital payment app, Tez plays a big part in increasing awareness about digital payments.  In just four months,  Google's payment app is in close competition with Axis Bank which has been processing similar digital transactions.

This week WhatsApp rolled out its payment feature for select users across the country, providing a strong boost to it's digital payment ecosystem. WhatsApp tries to incorporate the payment feature in its chat application itself. Although it would be challenging to bring in large modifications in one of the world's busiest app. The Unified Payments Interface (UPI) channel has overtaken mobile wallets in terms of monthly value transactions. Now UPI and mobile wallet transactions are almost equal to a quarter of the value of card payments made at point of sale terminals. Credit Suisse mentioned in its report that "Digital payments (in India) currently aggregate less than USD 200 billion, of which mobile is still at just USD 10 billion in financial year (FY) 2018 E (estimated) . We estimate that the total digital payment market in India will grow to USD 1 trillion by FY23E led by the growth in mobile payments".

After demontisation, a sudden spurt in the growth of digital money transactions was seen. The government's push for a cashless economy has also proven to be boost for digital payment applications. However, it remains to be seen if the new global  players are able to carve out a niche in the Indian market.