According to the reports by PwC India, the already existing and homegrown systems of payments like Unified Payments Interface (UPI) will continue to take digital payments ahead in India, but there will be newer approaches like digital currency, buy now pay later (BNPL), offline payments and corporate payments will further take ahead the industry.
The report by the department provides an insight into the current landscape and the future layout of the digital payments and the major factors that are responsible for influencing customer spending behaviour and all the transaction in the country. The insight also gives us an idea of the new and upcoming payments trends that are likely to be adopted by the players of the ecosystem and various industries. These trends might include payment systems like offline payments, e-RUPI, BNPL, and central bank digital currency (CBDC). The report has been titled ‘The Indian Payments Handbook – 2021-26’, which has pointed out the compound annual growth rate (CAGR) of 23%, at which the market of digital payments has grown, and is still expected to reach the transactions of 217 billion in FY26.
The Reserve Bank of India (RBI) initiated the UPI payments for feature phones last month.
Payments transformation leader and partner at PwC India, Mihir Gandhi has shared that PwC India expects the industry to pay attention and focus on magnifying the experience of the customers by providing them with more options for payment, undertaking transformation in technology and increasing security over the upcoming years. PwC has also stated that there has been a significant contribution of UPI in the growth of reaching a record of 22 billion transactions in the year 2020-21. Since 2018, there are expectations that UPI transactions will be able to reach a CAGR of 122%, which is around 169 billion by the year 2025-26.
There are other essential trends as well which will help the digital industry in India and contribute to its growth. It has also mentioned that the existing products will continue to be the way they are and will gain an extra share of the Indian customers. Alongside, new use cases will be enabled on UPI, cards, and Fastags for transactions. However, according to the report, poor connectivity and lack of access to the internet have also opened a gateway for offline payments, and this way, it will also contribute to the digital payments growth in India.
New trends might include payment systems like offline payments, e-RUPI, BNPL, and central bank digital currency (CBDC).
The Reserve Bank of India (RBI) initiated the UPI payments for feature phones the last month, which has enabled over 400 million users with feature phones to have an access to online payments. For the unversed, feature phones are the basic phones that are used only for functions like calling and text messaging.
The government is expected to announce a rise by the RBI in FY23 and the upcoming central bank digital currency could also prove to be a change in the game of online payments. The report states that the current landscape of the Indian payments has many rails and all of those can be taken over through some channels. In the present scenario, there is a need for CBDC to co-exist and compete with the other rails rather than try to replace them.