Digital payments are the new wave in the banking and financial industry with the growing technological innovations around the world. India is one of the developing nations that has been a part of this reformation for the last two years, which was an after effect of demonetization. Digital payments, also known as electronic transfer uses a medium like mobile phones to transfer money between bank accounts or pay for the retailers. The lack of hard cash availability during the time of monetization has forced the people towards digital wallets that has now become a daily routine without the requirement of cash payments for many transactions.
The digital payments market of India is foreseen to cross USD 1 trillion by 2023 from its current market value of around USD 200 billion according to Credit Suisse Group AG. Paytm is the leading digital wallet service provider in the country, followed by Google’s Tez and WhatsApp Payments. Unified Payments Interface (UPI) is also steadily gaining prominence around the nation. As per Credit Suisse Group, cash transactions account for almost 70% of value in India that is expected to move towards digital payments in the following years. Comparatively, India is behind China, which is far advanced in digital payments with the market value of USD 5 trillion.
Below are some of the prominent players in the Indian market that are offering the mobile payment services.
Paytm – It is the largest payments company in India with 150 million app downloads and financial support from China’s Alibaba and Ant Financial Services Company. Being operational in the market for a long time, the demonetization in the country in 2016 has fuelled the growth of these payments. The company was able to build a wide network of merchants providing attractive discounts and cashbacks to the customers. Since it is a licensed payments bank, involves different steps of enrolment, unlike other payment apps.
PhonePe – Launched by India’s e-commerce giant, Flipkart, the application has registered around 133 million downloads, next to Paytm. It received the required boost in the market after the acquisition of Flipkart’s majority stake by Walmart Inc. and has been funded an amount of USD 66 million to increase its customer reach. To compete with this, Amazon has started promoting its own Amazon Pay digital wallet.
Tez – Google introduced mobile payment service has crossed 50 million mobile downloads and is gaining prominence in the local market due to its easy to pay option. It uses Unified Payment Interface (UPI) of the banks and allows digital transactions in the real-time. New improvements like availability in regional languages and cashback through games is increasing the customer base for this service. It is also having an additional chat feature.
WhatsApp Payment – WhatsApp has launched its beta version of payments to million Indian users lately in February 2018. Being the country’s most used messaging app, it provides easy payment option to a huge number of users without any need to deposit the cash. It is still in its beta stage and requires full clearance from the Indian government to initiate all its payment services throughout the nation.
BHIM – It is developed by Unified Payments Interface (UPI) and supported by the government. Downloaded by 32 million people, the application is easy and accurate for the people in rural areas and towns of the country. The government of India is actively promoting this application by creating transaction targets for banks and state-owned companies.
Apart from these prominent digital payment options, there are few other services that are slowly gaining importance in the market of India. The future holds very much promising for the existing companies and new entrants as the nation has huge customer base and an untapped market position. The recent developments in the market include India Post Payments Bank, by the state-owned Department of Posts that is going to start its operations with 650 branches and thousands of trained postmen to help people in using the app, and Jio services by Reliance group, which can increase the market competition in the coming years.