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Indian digital payments to reach $1 trillion by 2023: Credit Suisse

Press Trust of India  |  New Delhi 

Entry of global players into India's digital payment space is expected to grow the segment by about five-fold to USD 1 trillion by 2023, investment firm said in a report.

"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 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, is already processing the same number of digital transactions as Axis (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 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 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.

The report by research analysts Ashish Gupta, Sunil Tirumalai, Kush Shah, and cited trend of digital payments in as example.

Digital payments in 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 users has jumped to 5-10 GB per month from 1GB in the last year. The surge in digital payments in 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 like UPI and Aadhaar that allow open-architecture and an inter-operable payment system to evolve.

"With 800 million accounts now linked to mobile, existing 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 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.)

First Published: Thu, February 15 2018. 20:40 IST