BENGALURU: With the increase in digital payments and fintech companies working on new products in the space, the business spends market in India is expected to reach USD 15 trillion by 2030 from USD 7 trillion now.
A whitepaper released by global management consulting firm Kearney and EnKash said though India is ahead in digitisation, there is more room to improve payments. Nidhi Tiwari, Partner, Kearney, said business spends are those that companies are doing towards either employee expenses, or supplier or vendor payments spends, and this will reach USD 15 trillion by the end of this decade.
“At present, small enterprises are using only cheques for payments, and cash payments are still prevalent in the case of micro-enterprises. After the pandemic, the penetration of digital payments has gone up and medium organisations are using either UPI or bank accounts,” she said, adding that close to 70-80 per cent of payments in medium enterprises are happening through digital mode.
About 97 per cent of the total businesses in India are small and medium (SMBs), micro-enterprises and unincorporated entities, while medium to large scale corporates accounts for 2 per cent. At the current rate, SMBs and similar players are likely to play a bigger role in the operations of all businesses, said Kearney.
Tiwari said though businesses have digitised the transfer of cash, the activities involved in enabling the processing are primarily manual. Though corporates are digitising the processes, small to medium size businesses are still evaluating various options.
The report said end-to-end digitisation of the payment process can release significant value for businesses. Of the 64 million businesses in India, there are about 3-4 million businesses that have shown rapid progress in digitising. Interestingly, commercial cards have medium adoption in large enterprises and low adoption in medium and small enterprises.