India's digital payments are likely to reach $7 trillion, double as compared to current levels by 2030, reported PTI quoting a Kerney and Amazon Pay joint study report named ‘How Urban India Pays’.
The digital transaction levels have seen a 138 per cent growth in the Unified Payment Interface (UPI) payments levels from the financial year 2018 to 2024. The digital payment system - UPI is developed by the National Payments Corporation of India (NPCI).
India's digital payments for retail transactions have grown to $3.6 trillion in the financial year 2023-24 when compared to $300 billion in the financial year 2017-18, according to the joint study quoted by PTI. UPI transactions were introduced in India on April 11, 2016.
The report also states that India's e-commerce market was worth $75 billion to $80 billion in 2022, which is expected to grow 21 per cent by 2030. In India, cards and digital wallet transactions make up to 10 per cent of the digital transaction value.
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India's digital transactions alone clocked in 46 per cent of the entire world's digital payment volumes in 2022, according to the report.
Digital payment exposure in India
In India, over 6,000 responders living in 120 cities of the country stated in the online survey that they preferred making digital payments over other methods to purchase goods or services online. The wealthy buyers said that they use digital payment methods for more than 80 per cent of their total transactions, as per the report.
Digital payments make up for 69 per cent of transactions said over 1,000 merchants who were sampled for the survey. The report highlighted that businesses from street vendors like paan shops to fruit sellers, food stalls, and kirana stores, are shifting to digital payments instead of cash. This gives rise to threats like cybersecurity cases of financial crimes, limited coverage and mutual trust.
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"Millennials and Gen X are leading in the adoption of all types of digital payment instruments," said the report. Digital makes up to 72 per cent of their total transactions.
Future of digital payments in India
The future of India's digital payments journey will be focused on the lower-income groups of consumers and small-town coverage, according to the report.
Small towns in India are still behind the big cities in terms of digital payments adoption with 65 per cent of the responders using digital mode, whereas in the larger cities, the number is 75 per cent users.
Tier 2 cities like Lucknow, Patna, Bhopal, Jaipur, Bhubaneshwar, Indore, Ahmedabad, and Pune are relatively close to their nearby metros in terms of digital payments exposure despite having a low retail market potential when compared to the top six metro cities like Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad.
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First Published:
14 Jul 2024, 07:06 PM IST
Business NewsNewsIndiaIndia’s retail digital payment may double to $7 trillion by 2030: Report
