Overview
The global digital payments industry has exhibited its resilience in 2021, developing at an 11% rate and arriving at another high of $2.1 trillion around the world. Development seemed solid across all regions, especially in Asia-Pacific and Africa enlisting double-digit yield. Through a global lens, the Indian payment sector is experiencing an ecosystem expansion and transfiguration altogether— a broad gamut of fintech, payments, and banking sub-ecosystems has appeared. Prominent players are emerging in the digital payments and banking sphere. The digital payments area has seen a massive roar over the past few years, booming at a compound annual growth rate (CAGR) of 30%.
The industry has especially expanded due to new developments paired with regulatory support and technological advancements. UPI has moved the dial forward, making 6.8 bn transactions worth INR 11.17 trillion in September alone. In addition, the card industry has also witnessed significant growth in terms of volume. The total number of active debit and credit cards circulated by the end of Q2 2022 crossed 1 bn. Bharat Bill Payment System (BBPS) as a platform is also emerging. Since its inception, the country saw new electronic billers; surging at a CAGR of 56%.
With the increasing inclination towards contactless payments, the growth pockets are bright for FinTechs in India. They are investing in infrastructure integrated with AI, machine learning, and blockchain in order to deliver real-time and personalized solutions to customers. If you look at the stats, India has over 2100 FinTechs, out of which 67% have emerged in the last five years. 23 FinTechs have so far earned the status of a unicorn. The market size is growing by leaps and bounds and will touch ~$150 Bn by 2025. $1 Tn in Assets Under Management (AUM) and $200 Bn in revenue by 2030.
However, the story of India Digital Payments does not end here. The new use cases like PaaS, BNPL, B2B payments and digital currencies can be considered major stimulators disrupting the business models of the existing companies. At the same time, regulatory authorities are devising a fresh umbrella body for payments which will be monitored by the provisions of Payments and Settlement systems (PSS). Innovations in payments have driven India into a universe of growth and opportunities. Now, we should focus on the key challenges- creating sustainability for the payments industry; setting a roadmap to profitability for businesses; developing a dynamic ecosystem where varied business models coexist and thrive.
TechCircle, in association with Hewlett Packard Enterprise and Ingram Micro, is organizing "Pay-IT Conclave 2023: Future of Payments – Optimising Gains” a summit to discuss, assess, and chart the future of the payment ecosystem. It shall offer necessary insights to stakeholders- banks, FinTechs, and payment entities for the sustainable and robust development of this sector. This one-day event will speak about challenges vs. opportunities, best practices to widen the economic value, automation, and digital footprints in FinTech and payments industry.
