India leads real-time payments market after China and South Korea
Real-time payments, mobile payments, digital payments, e-wallets — they’re often used synonymously, although they’re not exactly the same. Boosted by the growth of smartphone adoption and increasing internet penetration, especially across developing countries in Asia, mobile payments have really taken off since the onset of the pandemic.
Naturally, online sales have rocketed, be it for goods or digital services. The paradigm shift to digital ways of making payment has deeply impacted the way many companies do business.
Not all digital transactions use real-time payments
A recent report by EIU (The Economist Intelligence Unit) explored the digital payments revolution around the world and found that India is leading the real-time payments market, followed by China and South Korea. In terms of the mobile payment market, China leads instead, followed by India.
Whilst all digital payments rely on technology, not all of them are instantaneous like real-time payments. Real-time payments are increasingly popular, with a report recently showing that most Malaysians prefer real-time payments over others, losing only to cash payments.
Real-time payments (RTP) are essentially digital payments that can be initiated and completed instantaneously or near instantaneously. This is different from, say, credit or debit card payments that will take longer to process as they go through layers of queries and approvals.
India’s UPI driving digital payment growth
According to the report, India offers a prime example of the shift to modernize payments systems in order to keep commerce flowing and sustain economic growth. Although the country remains largely rural and therefore cash-centric, the pandemic has lifted digital payments, in terms of both volume and value, to heights far beyond the expectations of policy-makers who had created the enabling environment for their adoption.
Recently, India announced an interesting digital payment system, called e-RUPI. It is neither a cryptocurrency nor a central bank digital currency (CBDC). It is also not a digital or e-wallet either. The digital payment actually comes in the form of a pre-paid e-voucher from UPI (Unified Payments Interface).
India’s UPI illustrates how an enabling policy framework and supportive regulation can create the infrastructure needed for swift adoption. Government institutions, particularly the central bank, encouraged the use of tools such as QR codes for merchants and radio-frequency identification (RFID) tags for toll gates. This paved the way for India’s drive towards real-time payments, according to the EIU.
The prevalence of low-value payments in the Indian economy has led to the highest real-time transaction volumes of this type in the world. Similar trends are visible in other developing countries, however.
In the Philippines, the government is making a concerted effort to achieve a cash-free society by 2025 and aims to make half of its financial transactions digital by 2023. The rewards of this are numerous, most notably in terms of wider financial inclusion.
Following the success of India’s UPI, several countries are currently in the process of building instant real-time payment platforms. Brazil, for example, debuted its fast payment Platform, Pix, in late 2020.
In early 2021, Saudi Arabia unveiled its new version of the instant-payments platform, Sarie, which facilitates a quick transfer of funds using various methods of identification, including mobile numbers and email addresses.
Read More at https://techwireasia.com/2021/08/india-leads-real-time-payments-market-after-china-and-south-korea/