By Sandeep Sethi- VP sales, India and South-East Asia, Wibmo, a PayU company
The payment ecosystem has changed drastically in the last few years. Gone are the days when we relied solely on cash and cards to make purchases. Today, digital transactions have become the norm, offering seamless, fast, and secure payments. This change in the payment system is driven by technological innovations, changing customer expectations and regulatory requirements.
Picture this: you wake up late and rush to your office without skipping your morning coffee at home. On your way to the office, you decide to grab a cup from a nearby café. As you reach for your wallet, panic sets in—you’ve left it at home! But there’s no need to worry. With a quick scan of a QR code or a simple tap on your phone, you can make your payment instantly. This is how digital payments have revolutionised our daily transactions, offering convenience and reliability. With the onset of 2025, let’s discuss the five key trends to redefine digital payments even further.
Digital payments to remain at the forefront
Digital payments in India have revolutionised the economy, growing at an unprecedented pace over the last decade. In 2013, digital transactions stood at 222 crore, amounting to Rs 772 lakh crore. By 2024, these figures skyrocketed to 20,787 crore transactions, valued at Rs 2,758 lakh crore, representing a 94-fold increase in volume and a 3.5-fold rise in value.
This rapid transformation has been especially evident in the past five years, with digital payments growing 6.7 times in volume and 1.6 times in value. The sector has maintained a CAGR of 45.9% in transaction volume and 10.2% in value. The payments ecosystem now includes diverse options provided by banks and non-banking financial institutions, offering consumers seamless and convenient solutions. A significant driver of this digital surge has been the Unified Payments Interface (UPI), which accounted for 83% of India’s digital transactions in 2024, up from 34% in 2019. UPI’s convenience, accessibility, and widespread adoption have led to over 208.5 billion transactions, surpassing traditional payment methods like NEFT, RTGS, and cash transactions.
Digital payments will continue to dominate in 2025 and beyond, driven by advancements in fintech, increasing smartphone penetration, and government initiatives promoting a cashless economy.
Expanding regulatory oversight for nonbanks
Regulatory bodies are tightening their grip on nonbank financial companies (NBFCs), which have traditionally operated with minimal oversight. In 2024, the Consumer Financial Protection Bureau (CFPB) introduced rules that require digital wallets and payment applications to adhere to the same standards as traditional banks. This shift is likely to lead to consolidation, with smaller players struggling to comply while larger institutions leverage their existing compliance frameworks to maintain dominance.
The regulatory framework for digital payments in India is primarily overseen by the Reserve Bank of India (RBI), which establishes comprehensive rules to ensure secure and reliable financial transactions. The regulatory ecosystem encompasses multiple laws which mandate strict licensing, compliance, and security protocols for digital payment instruments. Key focus areas include mandatory KYC verification, two-factor authentication, encryption standards, and robust fraud monitoring mechanisms. The framework regulates various digital payment platforms, including mobile wallets, UPI, net banking, and emerging fintech solutions to meet evolving customer demands.
Expansion of buy now, pay later services
Rising inflation and changing consumer habits have led to the expansion of buy now, pay later (BNPL) services beyond traditional retail. We are already observing a rise in BNPL transactions as the BNPL offering is integrated into essential sectors such as housing, utilities, groceries, and car payments. This shift enables consumers to better manage their budgets, especially as inflation continues to impact everyday expenses. In India, recent years have witnessed the meteoric rise of the BNPL model, with many leading fintech brands offering the service. BNPL allows consumers to pay for their purchases in instalments over time instead of paying the entire amount upfront. With the market projected to reach US$14.3 billion in 2023, BNPL is expected to gain popularity in 2025 and beyond.
Rise of AI-driven fraud prevention
Artificial intelligence (AI) is becoming a cornerstone in fraud prevention. Generative AI has enabled fraudsters to develop more sophisticated scams, increasing the need for advanced security measures. Financial institutions are leveraging AI-powered fraud detection systems, which analyse real-time consumer behavior and transactions to prevent unauthorised access. For eg, Bangalore based Payment tech company Wibmo’s Trident solution, an Enterprise FRM solution offers AI-powered fraud detection solutions that enable real-time monitoring, allowing financial institutions to promptly detect and prevent fraudulent activities.
The evolution of cross-border payments
Cross-border payments are undergoing a significant transformation as consumers and businesses demand faster, more cost-effective solutions. Blockchain technology and digital currencies are emerging as viable alternatives to traditional banking systems, reducing transaction fees and increasing transparency. Many fintech companies are now offering multi-currency accounts, allowing users to hold funds in different currencies to minimise exchange rate volatility. This shift is expected to make international commerce more accessible and efficient for businesses and consumers.
The way forward
The digital payments landscape is evolving rapidly, driven by technological advancements, regulatory changes, and shifting consumer preferences. Payment providers must focus on innovation, security, and user experience to stay competitive and cater to changing customer preferences. Payment tech innovations are advancing at a very high pace. Payment tech companies like Wibmo are working with leading banks, acquirers and regulators to provide safe, cutting-edge payments for the ever-rising transaction volumes of an aspiring Digital India. The coming years will bring even more seamless, secure, and intelligent payment solutions that will redefine how we transact.
