BENGALURU: India’s digital payments industry will be able to take on the US and China in the next 2-3 years, the fourth edition of ‘The Era of Rising Fintech’ report released by leading fintech firm Razorpay said.
The digital payments growth will be led by UPI transactions, the number of which grew a whopping 885 per cent in 2019, as per the survey.
The overall digital transactions grew by 338 per cent in 2019 over the previous year, the report said. It is also for the first time that UPI (Unified Payment Interface) surpassed debit and credit cards as the preferred mode of payment, it said, predicting that UPI will surpass card payments in 2020 by nearly 20 per cent.
“A growth of 338 per cent in digital payments in a year (2018-19) is massive. It’s the highest we’ve seen so far in the country. Among other factors that led to this exponential growth, it was UPI that rose in prominence, dominating other modes of transactions. For the first time in the history of digital payments, we saw UPI overtaking cards. UPI has become the preferred choice not only for P2P (peer-to-peer) payments but also for P2M (peer-to-merchants) payments,” said Harshil Mathur, CEO and co-founder, Razorpay.
The usage of debit and credit cards for transactions is declining in the country from 56 per cent share in 2018 to 46 per cent in 2019. The share of UPI transactions among all digital payment modes grew from 17 per cent in 2018 to 38 per cent in 2019.
Google Pay (59 per cent), PhonePe (26 per cent) and Paytm (7 per cent) were the dominant payment networks for UPI transactions, whereas interestingly, the share of Bhim app developed by the National Payment Corporation of India in UPI transactions fell from 34 per cent in 2018 to 12 per cent in 2019.
Due to the growth in UPI transactions, the share of wallets and net banking declined.
The usage of net banking declined by 12 per cent, from 23.4 per cent in 2018 to 11.4 per cent in 2019, while among digital wallets that witnessed a slump were the three dominant players in the segment — Amazon Pay, Ola Money and PhonePe.
Food and Beverages (26 per cent), financial services (12 per cent) and gaming (8 per cent) were the three sectors where a majority of digital transactions happened.
Among financial services, digital payments were done for lending, mutual funds, insurance and utilities.