Digital payments to contribute 15% of India’s GDP as per Razorpay’s The Era of Rising Fintech report.
The drivers for digital payments include: Incentivised programs to promote digital payments and greater collaboration between banks and FinTech firms. A low cost infrastructure will ensure prolonged sustainability which will result in more POS terminals accompanied by better and cheaper payment options for merchants.
Customer demand for digital payments increased by 106% since January 2019 and UPI has recorded a growth of 222% from January – September, 2019.
Digital transactions grew by 383% in one year (April FY’18 – March FY’19). The highest adoption of digital payments was seen in the food and beverage sector (25%), followed by financial services (21%) and tours & travel (15%).
The country’s Silicon Valley, Bangalore, continues to top the list of the most digitised cities, followed by Hyderabad, Delhi, Mumbai and Pune.
Shashank Kumar, CTO and Co-Founder, Razorpay said, “A shooting growth of 383% over the past year is indicative of the level of digital adoption among Indian businesses and consumers. The increasing use of UPI powered applications and traditional businesses embracing new digital payment modes has resulted in creating an ecosystem of technologically evolved and savvy users. A number of game-changers such as universal acceptance of recurring payments and more SME-oriented products and services have proven to be beneficial for digital businesses this year.”
Tier 2 businesses will drive 40% of digital transactions by 2020 which will facilitate greater dependence on the digital infrastructure. The country can also expect 50% of internet users to start using digital payments by 2022.