The digital payment landscape in India is changing and growing like never before!
The fintech industry in India is booming. Businesses across the country are undergoing digital transformation to amplify their growth and enhance customer experiences. The pandemic disrupted every aspect of our lives in 2020. Nonetheless, it has promoted the use of technology in our daily lives. Individuals are now more interested in cashless payments to avoid physical contact, leading to a significant change in the digital payment landscape of the country; over the past year.
According to Razorpay, digital payment transactions have grown up to 76% within the last 12 months. There have been several first-time digital payment users. Traditional brick-and-mortar companies have also embraced digital payments over the past year. The industry saw a whopping growth of 569% in the use of payment options like Buy Now Pay Later (BNPL), indicating that individuals are opting for more efficient payment options and avoiding bulk payments. Several industries like education, travel, food and beverages, and others now prefer digital payments to maintain the Covid-19 safety protocols.
E-NACH is a new payment system that allows any user with a bank account to automate recurring payments. At the beginning of 2020, the industry recorded just about 500 transactions through the E-NACH system, whereas, within March 2021, it witnessed a growth of 23962%.
While Covid-19 promoted the use of digital payments, other factors that led to the growth of the digital payments market in India are as follows:
- Increased awareness and acceptance:
India’s digital payments market has witnessed exceptional growth over the past years, especially after the demonetization in 2016. Individuals are now more comfortable with digital payments than ever before. The growing number of initiatives like UPI, BHIM, RuPay, introduction to QR Codes, and other easy payment options has led to the increase in acceptance and awareness about the changing digital payment ecosystem of the country.
- Innovative technologies:
The emergence of improved technologies is one of the chief factors leading to the growth of the digital payments industry in India. Secure and scalable technologies ensure greater ROI to business leaders and guarantee regulated transactions.
- Rising e-commerce
Online transactions would continue to boost the digital payments market of the country. The Covid-19 pandemic saw customers taking to net banking and other digital payment facilities in categories like essential goods, groceries, retail, medical supplies, education, and others. Many e-commerce platforms are also promoting digital transactions by accepting payments only through online payment facilities.
- Increased regulations and cybersecurity
The growing reliance on technology calls for enhanced regulatory measures and cybersecurity. 2021 has seen an increased focus on developing regulations and security based on the emerging technologies to ensure secured payments by identifying and preventing different types of cyberattacks.
The Future of the Digital Payments Industry in India
According to reports, the Indian digital payments industry is estimated to grow up to US$700 billion by 2022. In the future, the fintech industry will innovate more dynamic yet safe transaction facilities to develop and promote the digital payment landscape in the country. We are already reaping the benefits of blockchain technology, cloud-based payments, cryptocurrencies, and other payment facilities powered by AI, ML, and IoT. It is pretty evident that the digital payments industry is about to grow more in the future, and it has astounding surprises in store.
