India’s Digital Payments Industry is on track to witness a meteoric surge to USD 500 billion by 2020, claims a recent report published by GSM Association and Boston Consulting Group.
The report cites that the rise will be triggered by India’s large internet user base, stating that over 50% of the country’s internet population will actively switch to digital payment modes. The recent demonetisation move saw lakhs of Indians switching to digital payment platforms to counter the intense cash crunch.
The increased Aadhaar coverage will also facilitate the shift to digital payment modes – over 90% of the country’s adult population are covered by the Aadhaar programme. The government is already working on a payment system that will enable digital payments through Aadhaar credentials of citizens.
Several smartphone manufacturers are already working on a digital interface that will record customer’s Aadhaar credentials and enable payments to be made in a swift, flexible and convenient manner.
BCG also estimates that digital payments will dominate online retail purchases, and will influence almost 45% of retail sales in the country by 2025. This comes as a welcome move, considering the fact that digital payments encourage financial transparency and weed out corruption at several levels of governance.
A statistic that forms the premise of the estimates concerning digital payments is the increase in India’s Internet user base. The number of internet users in India are expected to double – to a whopping 550 million – by 2020. This figure will include large sections of people from Rural India, older people and women.
Electronic payments have already picked up steam in India, and currently influence payments in several sectors ranging from industry, manufacturing and services.
The report also lauded the Indian government’s efforts in revolutionising the digital landscape in India and promoting transparency in financial transactions.