"Digital payments (in India) currently aggregate less than USD 200 billion, of which mobile is still at just USD 10 billion in financial year (FY) 2018 E (estimated) . We estimate that the total digital payment market in India will grow to USD 1 trillion by FY23E led by the growth in mobile payments," the report said.
It said that in just four months of launching its payments app, Google is already processing the same number of digital transactions as Axis Bank (4th highest among banks in India) and has resulted in unified payment interface (UPI) transactions increasing about eight times.
The digital payments will further explode when the most popular application in India,WhatsApp, integrates a payments button, the report said.
Share of cash transactions in India are estimated to account for 70 per cent of total transactions in value terms and 90 per cent in volume.
"Payment integration in to popular apps in India will drive the digital payment market in India to USD 1 trillion over the next five years. Digital payments in India are soaring on the back of the entry of global tech giants that are acting as aggregators for retail transactions," the report said.
Digital payments in China leapfrogged to over USD 5 trillion in the past four years on the back of rising mobile and data penetration.
"Data usage for 300 million Indian smartphone users has jumped to 5-10 GB per month from 1GB in the last year. The surge in digital payments in China was triggered by its integration into e-commerce and social platforms, which now have a 95 per cent market share," the report said.
It said that unlike China, mobile payments in India are being built on public infrastructure like UPI and Aadhaar that allow open-architecture and an inter-operable payment system to evolve.
"With 800 million bank accounts now linked to mobile, existing bank accounts should be mobile-transaction ready. We believe that the top four banks (SBI, HDFC Bank, ICICI, Axis) are better placed as the aggregators are expected to look to tie up with these franchises, given they account for about 50-70 per cent of non-cash transactions," the report said.
The Credit Suisse report said that there is also no loss of customers for the banks even as they transact on the platforms of these aggregators, and the banks would gain access to customer data.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)