2017 year-ender: Digital payments

The cash-crunch following demonetisation has written a great story for the digital payments space

The cash-crunch following demonetisation complemented by the government’s digital push has written a great story for the digital payments space in India over the past year with success stories, new regulations and changing dynamics.
 

UPI

 
While the United Payment Interface (UPI) shows multifold growth in both volume and value, the government’s dominating share with the BHIM app saw a decline with the entry of Google Tez while existing player PhonePe also increased its market share.

 

M-wallets and mobile banking (6.1 m-wallet)

 
Mobile banking is on a declining trend while e-wallets keep up their pace of growth. E-wallet companies are aggressively expanding their portfolio as well as partnering with banks to increase market share. The central bank’s decision to allow interoperability between wallets will see greater competition and acceptability of wallets in 2018.

Card payments

 While card payments, both debit and credit, are on the rise, Point of Sale(POS) transactions seem to be overpowering ATM transactions. While the pace of growth of volume and value of transactions at ATMs slows down, those at POS terminals are on the rise, especially with debit cards which have more than doubled. This will get a further boost in the upcoming year with the RBI’s revision of the merchant discount rate(MDR) and the government’s announcement to bear MDR charges for debit cards.