How india payment services market is positioned?
India
payment services market which has traditionally been
dominated by cash witnessed advancement towards digital transactions both in
terms of value and volume during demonetization phase in India. The total
number of ATMs (including onsite and offsite) was witnessed to increase from ~
as of 31st March 2013 to ~ as of 31st March 2018, thus displaying a five year
CAGR of ~% during the review period. Regulatory authorities such as the Reserve
Bank of India (RBI) and the National Payments Corporation of India (NPCI) play
a major role in establishing guidelines for effective working within India’s
payments landscape.
In India, merchant payments were
observed to be the central aspect of all payment services for large enterprises
as well as MSMEs, which are increasingly becoming integrated with PoS and mPoS
terminal devices. Surge in growth of electronic payments in India, along with
rising E-commerce and M-commerce transactions are further expected to give a
boost to numerous entities including payment gateway service providers and
payment aggregators that facilitate online payments in the country. Besides all
these advancements, cash still dominates the entire payment landscape in India
and is further expected to hold a majority share in future.
India Payment Services Market Segmentation
By Desktop and Mobile Payments
Desktop
payments were witnessed to dominate India payment services market with a volume
share of ~% in FY’2018. Increasing adoption of digital transactions post
demonetization coupled with affordable desktops and laptops for business
purpose has thrived the segments growth. On the other hand, mobile payments
were observed to capture the remaining volume share of ~% in India payment
services market in FY’2018.
By Type of Industry
Digital
transactions towards financial services such as inter or intra transfer of
funds, person-to-person funds, and merchant payments for small transaction
value dominated India payments market with a volume share of ~% in FY’2018. The
ease of conducting financial transactions through digital means is one of the
major driving forces behind the segment’s growth. The segment followed with a
collective volume share of ~% in India payment services market in FY’2018. Other services such as housing rent,
education, purchases of luxuries such as jewelries, cars and rest captured the
remaining volume share of ~% in FY’2018.
How m-wallet market of india is positioned?
A mobile wallet is digitally
equivalent of physical wallet, where a consumer can store money, make payments
or transfer money to other wallet accounts under the same company. M-wallet
transactions in India were observed to grow at a massive five year CAGR of ~%
over the review period FY’2013-FY’2018. Compared to other payment modes in
India, M-wallet service providers have emerged as the most significant
contributor in promoting electronic payments in the country owing to the
increasing usage of internet and smartphone users in the country.
Some of the
major companies having semi-closed wallets include Paytm, Mobikwik, Oxigen
wallet and others whereas, closed wallet type companies include SBI E-Buddy,
HDFC PayZapp and telecom operators such as Airtel Money, Jio Money, Vodafone
M-Pesa and others. Over the forecast period, mobile-wallet transactions are
further expected to increase to ~ million by the fiscal year end-ing 2023E and
on the other hand, India m-wallet transaction size is further anticipated to
increase to INR ~ billion in terms of transaction value by the fiscal year
ending 2023E; thus displaying a five year CAGR of ~% and ~% respectively.
What Is The Role Of Payment Gateweay Market In India
Payment gateways play a significant
role in E-commerce transactions by authorizing the payment between a merchant
and a consumer. Some of the leading payment gateway companies in India include
PayPal, Billdesk and others. Demanding factors from Indian millennials such as
faster check out and better convenience has been driving the growth of digital
payments in India. As a result, it has increased the role of payment gateway providers
in the digital payments landscape. Increasing cyber-crimes or threats have
forced companies to build platforms with advance security features for early
fraud detection and minimizing the collateral damage. The payment gateway
market in India was evaluated at INR ~ million in terms of transaction value in
the FY’2018.
Large
enterprises were witnessed to dominate the Indian payment gateway market with a
revenue share of ~% in terms of transaction volume in FY’2018. These
enterprises have a higher penetration in the digital payment ecosystem in
comparison with the small and medium scale enterprises, thus leaving them with
a limited volume share of ~% in the FY’2018.
Due to high
influence of open source payment gateway codes coupled with increasing banking
platforms has forced the existing payment gateway companies in India to think
upon differentiating their services and provide a value-add to their clients.
In near future, the payment gateway market is expected to generate a
transaction value of INR ~ million by the FY’2023E. Digital channels are the
pathway through which a bank can interact with its customers, therefore
developing digital channels as customer engagement will play a critical role.
How pos terminal market is positioned in india?
The growth
of electronic payments in India is highly dependent upon the card acceptance
infrastructure consisting of ATMs and PoS terminals. The Indian customers
showcased a positive attitude towards using debit and credit cards, which is
evident from a ~% and ~% growth respective at PoS terminals in terms of number
of transactions. Several initiatives such as Micro ATMs, Aadhaar-enabled
Payment Systems (AePS) and Prime Minister Jan Dhan Yojana (PMJDY) have been
driving the demand for PoS terminals in Tier 2 and Tier 3 cities, especially
the rural areas. State Bank of India (SBI) witnessed five times growth in the
total number of PoS device installations at merchant outlets owing to rising
number of digital and plastic card transactions in the country.
PoS terminals
market in India had witnessed high growth during the demonetization period. The
after effect of which was that there was an increase in deployment of PoS
terminals across all sectors such as restaurants, retail, hospitals,
warehouses, supermarket.
As India is
making efforts towards pushing plastic cash over physical cash; the sale of PoS
terminal devices is projected to increase on account of rising penetration of
debit and credit cards. India PoS terminal market is anticipated to generate a
transaction volume of ~ PoS terminals by the financial year ending 2023E.
How m-pos market is positioned in india?
Acceptance
of mPoS in the initial stage was dependent up on the price offering as several
merchants who wanted to offer their customers another choice of payment method
did not want to invest in costly traditional PoS terminals and therefore
preferred to acquire mPoS devices. In terms of number of device installations,
India mPoS market was evaluated at ~ thousand in as of 31st March 2013. India’s
techno savvy population and a favorable demographic dividend were the two major
factors which induced positive growth of mPoS in tier 1 and tier 2 cities in
India. A growing number of MSME’s and even some large merchants started to took
a note of mPoS, with early adopters preferring a tablet-based mPoS
implementation as a complement to traditional PoS or, in some cases, as a
replacement for cash registers. India mPoS market increased to ~ thousand
device installations as of 31st March 2018, thus growing at a five year CAGR of
~% over the review period FY’2013-FY’2018.
The total
number of inactive terminals is observed to be higher in Tier-3 cities with
micro merchants having the largest share in inactive terminals. On the other
hand, active terminals are dominated by large enterprises and SMEs, who are
present in Tier-1 and Tier-2 cities in India.
Future Outlook And Projections In India Payment Services Market
The rapid penetration of smartphones
along with widespread of internet connectivity on mobiles devices has created a
positive impact on the country’s payment services market. Digital payment
services provided by non-banking institutions and the rise of the fintech
sector, consumer expectations of one-touch payments, and progress in regulatory
governance and tax breaks, will altogether shape up the India’s payments
landscape in favor of digital solutions. India payment services market is
expected to generate a transaction volume of ~ million and a transaction value
of INR ~ trillion by the FY’2023E. Owing to a new generation of digital payment
services, opening up new opportunities for a relatively high proportion of
"unbanked" to make purchases online, the volume of transaction happening
through in digital landscape would change drastically. The growth of e-commerce
in India coupled with the country's immense potential provides lucrative
opportunities for retailers and merchants who can support India's digital
payment methods.
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