Overview of India Payment Service Market
India payment services market, which has traditionally been dominated by cash, witnessed advancement towards digital transactions both in terms of value and volume during the demonetization phase in India. The total market size for the India Payment service market has raised from INR ~ trillion in FY’16 to INR ~ trillion in FY21, 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.
In addition to this, emergence of consumer mobile wallets in India,
and UPI, especially for retail transactions has helped consumers with
person-to-person funds transfer, therefore facilitating small value
transactions. 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 Market Segmentation
The advent of
innovative electronic payment systems that leverage on technology which can be
used through internet and mobile, has led to electronic payment systems
dominating the retail payment space with around ~% share in terms of volume and
~% share in terms of value during the FY’20. Increased mobile and internet penetration
in the country has resulted in significant shift towards use of mobile /
internet based payment systems for effecting payments for purchase of goods and
services. Credit transfers from payment methods such as UPI, AePS, ABPS,
IMPS have the highest share (~%) among modes of payment in India payment
service market, followed by Card Payments, which constitute ~% of the total
market.
Indian Payment Service Market Future Outlook and Projections, FY’21-FY’26
The India Payment Service Market is expected to
grow at a CAGR of till 2026, reaching a
market size of INR ~ Trillion. Growth in digital payments in India will be
driven by multiple factors such as the launch of new and innovative payment
products, increase demand for cashless transaction due to Covid19, increasing
smartphone adoption, a growing need for faster payment modes, and a strong push
from the Government and regulators towards adoption of digital channels.
The digital
payment ecosystem will flourish with continuous efforts from the Government,
regulators and payment companies to increase awareness and trust. We believe
that the future success of digital payments will be driven mainly by the
factors such as overlay services, contextual payments, offline payments,
invisible payments, etc.
Reserve Bank of India
The PSS Act along with the Payment and Settlement System Regulations, 2008 underlines the role of RBI as the sole regulator to oversee the payments market and no other person or entity can operate a payment system in India unless authorized by RBI. RBI has been instrumental in supporting the government's digitalization narrative, be it setting up of NPCI for managing digital payments in the retail sector or strengthening the bank's infrastructure for technological driven operations.
National Payment Corporation of
India
NPCI, the brainchild of RBI and Indian Banks' Association (IBA), has revolutionized the retail payment system since its incorporation. By launching services and platforms to transform the Indian digital payment ecosystem, NPCI has proven to be one of the major organizations for the implementation of digital payments in Indian economy.
Snapshot
of Credit Card And Debit Card Coverage In India
While the shift towards a more cashless economy is a threat to the credit/debit card market, it has maintained a healthy growth rate attributing to the fact that it is now a staple to opening a bank account in India. Plastic cards for instance, ATM cards, debit and credit cards are now being used by customers as an electronic payment tool, thereby helping in clearing and settling the payment process.
Increasing penetration of credit cards in metro areas coupled with
rising usage of RuPay cards in tier 2 and tier 3 cities are some of the driving
forces in India consumer payments landscape. In terms of total number of
outstanding cards, credit cards were observed to grow at a five year CAGR of ~ %
whereas; debit cards grew at a five year CAGR of ~ % during the review period
FY’2016-FY’2021.
Unified Payments Interface (UPI) Consumer
Payment Landscape
As of August 2021, UPI forms XX% of all retail payment in India. From financial year 2015-21, the domestic retail payment by value on UPI grew at XX% at compound annual growth rate while between 2017 and 2021, the collective payment on all forms of UPI grew at XX% CAGR. The year 2020 set a new record for Unified Payment Interface (UPI) transactions in India. The total UPI transactions in 2020 reached the figure of XX Billion in 2020. In comparison, the total amount of UPI transactions was XX Billion in 2019, a surge of XX% in transaction volume. As of 31st March 2021, there are XX banks available on UPI.
Immediate Payment Service (IMPS) Consumer
Payment Landscape
IMPS are a multi-channel system that can be accessed using mobile, ATM, internet banking, bank branches, BCs, etc. Besides banks, the system allows non-bank entities such as PPI issuers to participate and facilitate remittances from wallets to the recipient bank accounts. From FY’14 to FY’21, IMPS transactions have seen a rise of CAGR XX% in terms of value. This has been primarily driven by wide-scale adoption of IMPS, with over XX banks live on IMPS in FY’21, along with the huge number of co-operative banks as the operators helping IMPS to be available to a large chunk of rural population.
Adhaar Enabled Payment System
(AePS) Consumer Payment Landscape
Adhaar Enabled Payment System (“AePS”) has been operational since January 2011. It allows online interoperable transactions at Micro-ATM through the BCs of any bank using Adhaar authentication. While Mainline Commercial Banks have the largest share among the institutions live on AePS, Regional Rural banks and Co-operative banks have ~XX% share. This is a common theme among non-internet/non-smartphone payment methods, where rural banks see larger chunks of transactions in the rural and non-metro areas.
Unstructured Supplementary
Service Data – Bharat Interface for Money (Ussd-Bhim) Consumer Payment
Landscape
With growing mobile density, banks started offering mobile banking services to their customers using the USSD channel through bilateral tieups with individual telecom providers. The rise in USSD-BHIM transactions has been steady in the last few years, with a surge in usage in FY’21 (XX%), which can be attributed to the comparative recovery in FY’21 from the Covid pandemic. The usage of SMS rather than internet has allowed those without access to internet and smart-phones to have access to cashless payment alternative.
Key Segments
Covered in India Payment Services Market:-
India
Payment Services Market
By Payment Card Usage (Cash Payments and Cash
Withdrawals)
By Number of Outstanding Debit Cards (PSU and
Private Banks)
By Number of Outstanding Debit Cards: Market
Share of Banks (State Bank of India, Bank of Baroda, Paytm Payments Bank,
Punjab National Bank, Union Bank of India, Bank of India, Canara Bank, ICICI
Bank and others)
By Number of Outstanding Credit Cards (PSU and
Private Banks)
By Number of Outstanding Credit Cards: Market
Share of Banks (HDFC Bank, State Bank of India, ICICI Bank, Axis Bank, Ratnakar
Bank, Citi Bank, Kotak Mahindra Bank, American Express and others)
By Modes of Payment (RTGS, Credit Transfers,
Debit Transfers, Direct Debits and Card Payments)
Credit and
Debit Card Coverage
By Number of Credit Card Transactions (PoS and
ATM)
By Credit Card Transaction Value (PoS and ATM)
By Number of Debit Card Transactions (PoS and
ATM)
By Debit Card Transaction Value (PoS and ATM)
By Number of ATMs and PoS Terminals
By Number of Outstanding Cards (Credit and Debit Cards)
Immediate
Payment Service (IMPS) Consumer Payment Landscape
By Type of Institution (Small Finance Bank, PSU,
Private and Payments Bank, Public and Private Institutions, Regional Rural Bank
and Co-operative Banks)
Aadhaar
Enabled Payment System (AePS) Consumer Payment Landscape
By Types of Banks: Number of AePS Operator
(Mainline Commercial Banks, Regional Rural Banks, Co-operative Banks, Payment
Banks and Small Finance Banks)
India PoS Terminal
Market
By Number of Terminals (Active and Inactive
Terminals)
By Metro and Non-metro cities
By End User Industry (Large Enterprises, SME’s
and Micro Merchants)
By Metro and Non-metro cities
Key Target
Audience:-
Banks and Financial Institutions
Cash Reconciliation Companies
Payment Aggregators
Payment Network Companies
Payment Interface Companies
M-Wallet Companies
Payment Gateway Companies
PoS Terminal Companies
M-PoS Terminal Companies
Time Period
Captured in the Report:-
Historical
Period: FY’15-FY’21
Forecast Period: FY’21-FY’26E
Payment
Service Companies in India:-
M-Wallet Companies
Paytm
Mobikwik
Freecharge
Oxigen
Telecom Operators (Jio Money,
Airtel Money, Idea Money, Vodafone M-Pesa)
Others (SBI Buddy, PayZapp by
HDFC, Pockets by ICICI and other bank wallets)
Payment Gateway Companies
PayU
Paypal
Razorpay
Others (CC Avenue and Citruspay)
PoS Terminal Companies
Ingenico
Verifone India
PineLabs
PAX Technologies
Ezetap
Itzcash
M-PoS Companies
M-Swipe
Payswiff
Mosambee
Bijlipay
Key Topics Covered in the Report:-
India Payment Services Market
Regulatory Framework in India
Payment Services Market
India Payment Services Market
Segmentation
India Payment Services Market
Future Outlook and Projections
Credit and Debit Card Coverage
Immediate Payment Service (IMPS)
Consumer Payment Landscape
Aadhaar Enabled Payment System
(AePS) Consumer Payment Landscape
Unstructured Supplementary
Service Data - Bharat Interface for Money (USSD-BHIM) Consumer Payment
Landscape
Unified Payments Interface (UPI)
Consumer Payment Landscape
Cross Comparison of Different
Payment Modes (IMPS, AePS, USSD-BHIM and UPI) in India Payment Services Market
India
Bill Payment Market
India
Omni-Channel Payments Processing Market
India
Bank Reconciliation Software Market
India
Digital Payment Market
India
Cloud Security Services Market
India
Payment Security Services Market
India M-Wallet Market
Market Share of M-Wallet Players
in India
Competitive Landscape of India
M-Wallet Market
Trends and Developments in India
M-Wallet Market
India Payment Gateway Market
India Point of Sale (PoS)
Terminal Market
India Point of Sale (PoS)
Terminal Competitive Landscape
India Point of Sale (PoS)
Terminal Market Segmentation
India Point of Sale (PoS)
Terminal Market Future Outlook and Projections
India m-PoS Market
CUG Cards / Prepaid Closed Loop
Cards
Cloud / Security Outsourcing in
Payments Technology
Government
Regulations
Assessment of
COVID Impact on Contactless Transactions and POS Terminals
Coverage on OMC
Digital Space
For More Information, refer to below link:-
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Ken Research
Ankur Gupta, Head Marketing & Communications
Support@kenresearch.com
+91-9015378249
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