India’s digital tale is fresh but thrilling from being a cash-obsessed economy. The country’s transaction sector is moving through a transnational stage, driven by liberal legislative measures and enhanced use of the portable web. The next few years will see a whole fresh manner of moving cash in the Indian economy.
Current Waters
Digital payments began to rise with the growth of e-commerce companies followed by the emergence of digital wallet companies. To attract customers, the digital wallets used the credit system to do profitable deals and cashback to get customers on track. Thanks to the ease of use, attractive offers, and increased smartphone penetration, digital wallet companies have found their way to both the consumer’s phone and the pocket.
The digital wallets began to encourage customers to use them for offline point of sale (POS) transactions as well as in shopping malls, supermarkets, grocery stores, restaurants and gas/petrol stations to expand their reach. In the coming years, these POS transactions are expected to become a major contributor to the digital payment platform. Clearly, digital wallets are playing a distinctive part in promoting the development of the electronic banking industry. The other significant part of the electronic deposit tale is internet ticketing, tourism, and entertainment businesses such as IRCTC (Railways), MakeMyTrip, Yatra, Ibibo, Cleartrip (Airlines and Hotels), Trivago (restaurants), RedBus (busses) and Bookmyshow (film and conventions ticketing).
Zooming with the Scope
The digital transaction sector is getting popularity and is expected to develop at an exponential rate. Eighty-one percent of current digital card customers love the medium to other non-cash billing techniques such as checks or demand drafts. Online shopping, payment of utility bills (such as electricity, mobile bills, water bills, etc.) and movie tickets are the three things that an Indian user pays primarily through a digital platform. Additionally, the Indian digital payment sector is projected to reach $500 billion by 2020, adding 15 percent to the country’s GDP, according to a study by Google and Boston Consulting Group (BCG).
An interesting angle to India’s digital payment story is that it will be dominated by microtransactions (value tractions lower than Rs 100). In practice, 50 percent of person-to-commercial operations are to be under Rs.100, claims the Google-BCG study. Alternate digital payment instruments such as digital wallets, UPI, payment banks, and Bharat QR are expected to grow fiercely and are estimated to double their contribution to 30% in the digital payment industry. Electronic billing sector development will be driven by digital/mobile wallets. Mobile wallets will experience a compound annual growth rate (CAGR) of 148 percent over the next five years and will be $4.4 billion by 2022, according to the World Payment Report of the Capgemini.
Key Soldiers
This rapid development of the electronic transaction industry is influenced by various variables, including the comfort of the transaction, ever-growing mobile usage, rising non-bank billing agencies (transaction banks, electronic wallets, etc.), innovative legislative practices, and growing customer willingness for the electronic billing system. The ease of paying along with the accessibility of profitable deals are two main variables influencing the development of digital transfers in India. This, coupled with increasing smartphone penetration, is proving to be a boon for the digital payment sector. India presently has the world’s fifth-biggest online customer base with 300 million customers. Fifty percent of these consumers are mobile-only linked to the Internet. These 150 million mobile-only internet users play a key role in the growth story of digital payments.
The emergence of next-generation billing technologies such as deposit centers, electronic wallets, and BharatQR is also fueling electronic transactions. According to the IDC Financial Insights study named The Future of Payments in India: More Spectacular Growth Ahead, it is expected that electronic transactions in India will replace money by 2022. Another main cause of digital transactions is favorable strategy environment modifications and public efforts such as the introduction of fresh payment schemes such as UPI, Aadhar related electronic transfers, and digital facilities enhancement.
Current Standards
When it comes to the electronic payment environment, India has the most developed scheme relative to 25 other nations interviewed by FIS, a US-based financial engineering firm. This included the United Kingdom, China, and Japan. The parameters used by FIS to measure digital payments in these 25 countries include service availability, adoption, and immediate payment. FIS’ Flavors of Fast used the Faster Payments Innovation Index (FPII) rates of different payment systems across these 25 countries on a scale of 1-5, with 5 being the highest rating. According to FPII, India’s IMPS service was the only scheme to get a level 5 score, abandoning nations such as UK, Singapore, Denmark, Switzerland, China, Japan, and others. This definitely makes India’s digital money tale an interesting one.
Scanning the Future
Clearly, the electronic billing room is being molded and over the past two years, the industry has experienced enormous development, innovation, and governmental aid. Such has been the changes that India has become the most evolved country in the digital payment ecosystem. The aim should be to maintain the momentum flowing with more public assistance and competitors technologies, security, and comfort.
