, India Immediate Payment Service (IMPS), India Aadhaar Enabled Payment System (AePS).){kind=link}
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.
Role of Regulatory Authorities (RBI, NPCI) in the Indian Payment Service Market
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
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