India’s massive population of 1.2 Billion makes even modest market developments, extremely significant in this rapidly emerging economy. The creamy layer of 80-100 million people are all fitted with latest smartphones, connected homes and good per capita income. These are the people who do credit card transactions, transfer funds online, use mobile banking apps quite often and are even trying early versions of mobile wallet. The digital payments industry in India is expected to grow by 40% to reach $20.48 Billion by the end of 2014, according to a study released on 21st May 2014 by IAMAI (Internet and Mobile Association of India), PCI (Payments Council of India) and IMRB. This is a result of a surge in the number of persons utilizing debit or credit cards, cash cards as well online transactions.
- According to the study, the digital payments industry in India was estimated at $14.51 Bn in December, last year.
- The study included digital payments such as net banking, credit/debit card transactions as well as people utilizing prepaid cash cards, mobile wallet and IMPS.
- The study did not include remittances, however.
- The market for payments made via digital methods grew at a healthy CAGR of 10% per annum from 2010 to 2013.
- Out of around 800 Mn online transactions made in 2013, nearly 53 per cent of them were made using credit/debit cards, says the report.
- Of this credit cards constituted 21% while debit cards accounted for 32% of total payments.
- Online travel (including train and air ticket bookings), tour packages and hotel accommodations contributed almost 60% of the digital payments.
- This was followed by financial services (online tax filing, online mobile recharge and DTH service, utilities bill payment and insurance premium) and e-commerce.
Other payment methods included Digital downloads (downloads of e-Books, music and movies) and other online services, such as websites for searching jobs (4%), real estate (2%) and matrimonial (2%).
You must be thinking by now what is so great about these numbers. Nothing much if you compare but its a good start. In a country which had 97% to 98% transactions being done in cash its promising to see 40% growth in digital payments.