India digital payments market is estimated to be valued at US$24.180 billion in 2020.
The market has seen positive growth in the number of people opting for digital payments during the pandemic, given the government regulations and laws encouraging social distancing and touchless transactions. The market is expected to grow at a significant rate in the coming years owing to the increased number of people who opted for digital payments during the pandemic, and the increasing awareness about the “Digital India” campaign wherein the digitalization of banking services has been made easier for people to access. The market is also fuelled by the increasing use of UPI payment options through both wallets and banks, which has made payments through the bank of consumers a lot easier. The payment wallet solution will continue to dominate the market in the coming years as well, owing to the increase in the frequency as well as the user base for the solution. The payment wallet solution allows the user to have a digital wallet wherein the money can be easily transferred from their bank using various methods like UPI, net banking, etc.
THE PANDEMIC PROVED TO BE A TAILWIND FOR THE MARKET
The digital payments market in India is fueled by the lockdown and the pandemic, which encouraged the use of touchless payment options and thus proved to be a successful tailwind to the market. The government encouraged the population to use more touchless payment options and thus making more people use digital payment options. Furthermore, with an increased user base, service providers are offering more on their platforms to retain customers. For example, the Paytm Payments bank now allows customers to pay for electricity bills, has a Paytm Malls option with attractive cashback offers, and so on. With the lockdown in the picture, the customers opted for shopping online more often than going to offline stores and thus helping the digital payments market in India to grow.
RETAIL AND E-COMMERCE ARE SET TO GROW AT THE HIGHEST RATE
With COVID-19 in the picture and the consecutive lockdowns to fight the pandemic, the e-commerce market has seen significant growth in its user base, with online grocery stores like Grofers and Big Basket witnessing the highest of them all. Even after the lockdown, the population was encouraged to use touchless payment methods to limit human touch. Considering the pandemic, a significant percentage of the population shifted towards online shopping and digital payments. The trend is expected to grow during the coming years.
INITIATIVES BY THE GOVERNMENT WILL DRIVE THE MARKET
The government encouraging the population to use digital payment methods to avoid the human touch has also come up with important initiatives like the Ministry of Electronics and Information technology (MeitY) has come up with an initiative named Digidhan, wherein the ministry is collaborating with key stakeholders in the industry for the promotion of digital payments. The ministry is also introducing newer measures to increase awareness about digital payment methods by setting the target for banks to process digital payment transactions.
The digital payment market in India witnessed a healthy growth rate during the outbreak of the COVID-19 pandemic. The growth in the market is due to the various government regulations and restrictions to encourage social distancing and touchless transactions. Moreover, the increasing awareness of the Digital India campaign will significantly contribute to the market growth. The market grew at an impressive pace in 2020-2021 and is projected to continue the high growth. Several digital payment companies are offering more options on their platforms to retain more customers. Pandemic has constrained the opportunity to spend offline because of which consumer spending has increased to online purchases which are projected to drive the market growth.
PhonePe Private Limited
Razorpay Software Pvt Ltd
PayU Payments Pvt Ltd
Paytm Payments Bank Limited
Bharat Interface for money (BHIM UPI)
PayKun Payment Solutions Private Limited
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