Digi payments biz to touch $500 bn by 2020

Digi payments biz to touch $500 bn by 2020

Digi payments biz to touch $500 bn by 2020

Digital payments industry in India is projected to grow to be around $500 billion, contributing 15% to India’s GDP, according to a report.

Non-cash contribution in the consumer payments segment will double to 40%, according to ‘Digital Payments 2020’, a report by Google and Boston Consulting Group (BCG).

 The report is based on a qualitative and quantitative research executed by Nielsen. Insights from this research were then combined with BCG’s proprietary sizing model as well as Google and BCG’s industry intelligence. For the purpose of the study, Nielsen conducted 14 group discussions, and 26 in-depth interviews for users and merchants in three cities (Mumbai, Lucknow, Delhi), and inputs from these were then used to form a comprehensive consumer and merchant quantitative survey. The consumer survey covered over 3,500 respondents (digital consumers - 1516, remittance users - 917 and merchants - 917), across nine geographies - Delhi, Mumbai, Bengaluru, Ludhiana, Lucknow, Indore, Surat, Vishakapatnam and Coimbatore.

The report further goes on to state that Indian consumers are 90% as likely to use digital payments for both online as well as offline transactions. Over 60% of digital payments value will be contributed by offline points of sale such as unorganised retail, eateries and transport, among others.

 Micro-transactions will form a substantial portion of the industry, with over 50% of person-to-merchant transactions expected to be under Rs 100. The value of remittances and money transfer that will pass through alternate digital payment instruments will double to 30% by 2020, the report states.

 “Global digital payments is undergoing rapid transformation and is set to grow four times in value by 2020. India is on an even more exponential growth trajectory,” BCG senior partner and managing director Alpesh Shah said.

 The smartphone explosion will usher in a new era in digital payments in India over the next few years that will see digital payments exceed $500 billion by 2020 and non-cash transactions exceed cash transactions by 2023, Shah added.