BENGALURU: Deeper mobile internet penetration, pervasive adoption of Unified Payment Interface (UPI) and flourishing e-commerce among the Tier 1 and Tier 2 cities of India have contributed to their faster adoption of digital payment services, PhonePe’s CEO and co-founder, Rahul Chari, said during a panel discussion at the Bengaluru Tech Summit.
The discussion was themed on the target of achieving a billion digital transactions every month across the country.
“The levels at which the consumers in the Tier 1 and 2 cities are adopting digital payments are amazing,” Chari said.
He added that the wider presence of e-commerce channels and a large number of consumers they had been able to bring on board had simultaneously pushed digital transactions among the people there.
He added that digital transactions had grown over the past few years due to a surge in the number of money transfers made through digital platforms from smaller cities and towns (Tier 3).
“There is a huge migration of people who used bank transfers earlier to send money back home to digital platforms in remote corners of the country,” the PhonePe CEO said.
He said that the current data which accounted for the total number of people using digital transactions was not updated as it did not include those who received the money through such platforms.
Shashank Kumar, CEO and founder, Razorpay, said the digital payment market in India was growing ten times a year and that there had been tremendous growth in the smaller towns and cities across the country.
Kumar said that the emergence of consumer lending companies, fintech startups and their ability to give low-interest, smaller loans had also enabled the retailers and other businesses there adopt the digital payment platforms.
As per a recent study by Razorpay, the UPI service, in particular, accounted for 50.49 per cent of all digital transactions.