UPI almost the default payment option, says report
India’s e-commerce market is projected to grow to US$150 billion in 2026 from US$83 billion in 2022, according to 2023 Global Payments Report released by FIS® (NYSE: FIS) on 24 Mar 2023.
With Cash use declining from 71% of Point of Sale (POS) transaction value in 2019 to just 27% in 2022, India has emerged as a global leader in payments with the development of its next-generation real-time payments (RTP) infrastructure, the Unified Payments Interface (UPI).
It has helped E-commerce account-to-account (A2A) payments grow to US$12 billion, up 53% from 2021 to 2022, according to the report released by the global financial technology leader, the Worldpay. The FIS Global Payments Report 2023 examines how consumers pay today both in-store and online across 40 global markets.
Findings from the 2023 report show that there were almost 70 real-time payment schemes in 2022 which provided high-speed payment rails that drove A2A payments to account for US$525 billion in global e-commerce transaction value, up 13% from US$463 billion in 2021.
While cash is still there, increasingly a majority of peer-to-peer transaction are done through UPI. According to the data released by FIS, cash is expected to decline by 34% in transaction value by 2026 and digital wallets are expected to rise in transaction value by 88% by 2026.
In the online space, the e-commerce market size is expected to grow by 82% by 2026 providing a greater boost to digital payments.
India’s UPI has almost become the default payment option, growing at a huge 427% in transaction volume between March 2020 and August 2022.
Its seamless interoperability with commercial wallets such as Google Pay, Paytm and PhonePe, has helped digital wallets grow from 5% POS market share in 2019 to 35% in 2022.
“The success of UPI in India is changing consumers payment preferences faster than anyone could have predicted,” said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at Jacksonville, Florida-headquartered FIS.
“UPI gives consumers the ability to transfer funds easily and instantly, 24/7, free of charge, from one bank account to another, and its success shows consumers want more choice, convenience and control at the checkout.
“It is driving consumers away from cash and helping to drive financial inclusion all at the same time and is making India a leader in payments across not just the region, but the globe.
“The development of real-time payment schemes by other central banks – and, critically, the cooperation between those central banks – is also helping to fuel cross-border commerce, providing merchants with a significant opportunity for growth moving forward,” he said.
The Worldpay from FIS Global Payments Report 2023 was based on a survey of 46,000 consumers, secondary research and extensive validation by payments experts from each region. fiinews.com
