Digital payments to skyrocket 3X to over Rs 7,000 lakh cr by FY25; mobile payments to see growth
The nascent yet fast-evolving digital payments industry in India, propelled by policy framework and technology penetration, is expected to grow at a compound annual growth rate of 27 per cent during the FY20-25 period. The growth in retail electronic payment systems including National Electronic Fund Transfer (NEFT), mobile banking, and development of payment acceptance infrastructure is likely to boost digital payment transactions from Rs 2,153 lakh crore in FY20 to Rs 7,092 lakh crore in FY25, according to the India Trend Book Report 2021 by the Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young.
The digital payments market, which has been led by companies such as Paytm, PhonePe, Pine Labs, Razorpay, BharatPe, and others on the B2C and B2B sides, has surged expeditiously with businesses offering cash backs, rewards, and offers to woo customers. Moreover, the recent pandemic has stimulated the demand for digital wallets as contactless payment is reckoned as the new normal protocol. Policy frameworks, on the other hand, such as Pre-Paid Instruments (PPI), Universal Payment Interface (UPI) by the NPCI apart from Aadhar, and the launch of BHIM-app have driven the financial inclusion and improved the payment acceptance infrastructure in the country.
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