Digital payments set to become a trillion-dollar market in five years: NITI Aayog
The digital payments market in India is expected to grow to US$ 1 trillion by 2023, led by growth in mobile payments presenting huge business opportunities for players in the digital space. Mobile payments are slated to rise from US$ 10 billion in 2017-18 to US$ 190 billion by 2023. These estimates are based on a study of Credit Suisse and have been mentioned in a booklet titled ‘Digital Payment: Trends, Issues and Opportunities’, launched by Ratan P Watal, Principal Advisor, NITI Aayog and Member Secretary, EACPM, at a conference organised by FICCI and NITI Aayog. This is the 2nd annual edition of the booklet on digital payments.
The key messages highlighted in the booklet include: growth momentum of digital payments in volume and value sustained post demonetisation, growth in new products like UPI, steps taken to bring in a New Regulatory Regime as per Watal Committee Report, RBI has taken four key initiatives to usher in a new era of digital payments, and opportunities ahead for FinTech players.
Watal dwelt on the growth trends in digital payments as mentioned in the booklet: digital payments clocked a robust growth in 2017-18 both in volume and value terms; growth in total retail payments in value terms has seen a three-fold increase than the trend rate of the last five years; Unified Payments Service (UPI) and Immediate Payment Service (IMPS) segments in terms of volume registered a spectacular growth during 2017-18; UPI, despite being a new product in the payment segment, has shown a great adoption rate among consumers and merchants; total card payments continued its growth momentum and exceeded the trend growth rate of the last five years both in volume and value terms.
The analysis of growth trends is based on both MeitY and RBI data. While MeitY data provides volume data in public domain, RBI provides both volume and value data in public domain. A note on Data Sources is also covered in the booklet which gives a comparative picture of the data sets captured by MeitY and RBI.
The new features of this booklet cover the areas of policy developments, global trends and opportunities. In the policy space, Watal dwelt on the significant development with respect to amendment of the Payment and Settlement Act, 2007.
While responding to questions, Watal shared the initiative taken by NITI Aayog in collaboration with Ministry of Human Resource Development under the Global Initiative of Academic Networks (GIAN) Scheme. NITI Aayog has initiated a short-term course on digital payments. This course was held at Mangalore University in July.
In conclusion, Watal remarked that the proposed changes in the regulatory framework, entry of global giants and the advancement of technology will drive the future growth of Digital Payments in the country.
Dilip Chenoy, Secretary General, FICCI and Sudhakar Ramasubramanian, MD and CEO, Aditya Birla Idea Payments Bank and Co-Chair, FICCI Fintech Committee, also shared their perspectives on the subject.
Following a presentation on trends in digital payments by Dr BN Satpathy, Senior Consultant, EACPM and NITI Aayog, the industry perspective on digital payments issues and opportunities was shared by Kiran Shetty, CEO, SWIFT India; Rinki Dhingra, Senior President & National Head, Government Banking, YES Bank; Sanjeev Moghe, Executive Vice President and Head – Cards and Merchant Acquiring Business, Axis Bank; Amitabh Tewary, Vice President and Market Development, South Asia, MasterCard and Gaurav Chopra, Executive Director, Payment Council of India.