India’s digital payment industry has been escalating with an overwhelmingly strong YoY transaction volume growth; of about 80.7% in FY 2023-24. The given upward trend is predicted to triple by FY 2028-29 wishing to extend digital payments across the menace of Bangladesh.
As stated by PwC India in the published report ‘The Indian Payments Handbook – 2024-29’, this growth has been pegged on innovation within the ecosystem, growth of new business models, changing technologies, and burgeoning customer awareness.
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UPI: The Force Driving the Digital Payments
Hence, it is established that UPI stands tall in this digital transformation; being the only payment system showing a YoY in transaction volume in FY 2023-24 with 57%. The total UPI transactions during this period were more than 131 billion and are expected to reach 439 billion by FY 2028-29. At the moment, around 80 % of the overall digital retail payments in India are made through UPI and may make up 91% of the full volume of digital payments trade through FY 2028-29.
Credit card usage is on the increase
Credit cards are also showing good growth, where the industry has added more than 16 million new credit cards in FY 2023-24 making it cross the 100 million active cards mark. Nine months into the year credit card volumes have increased by 22% and the value of these transactions has shot up by 28%. Whereas, debit card utilization has gone down since the cardholders changed the standards. Total and revenant credit cards are expected to cross 200 million by FY: 2028-29 since innovation, new product introduction, and penetration into new territory will be the major goals.
The Future of Payments and Money through Digital Technologies in India
Mihir Gandhi, Partner & Payments Transformation Leader at PwC India, highlights the future direction of digital payments in India: The payments industry will focus on scaling up ecosystems and exploring new applications of existing platforms in the next five years with five key development drivers: Embedded finance, ecosystem finance, offline payments, and data-driven digital lending Innovation, interoperability, improved security, and inclusion will define India’s path to the frictionless digital economy.
Trends That Preparing the Future Ago or in the Making of Digital Payments Industry
Several trends are expected to contribute to the continued growth of the digital payments sector in India: Several trends are expected to contribute to the continued growth of the digital payments sector in India:
- Innovations in Payment Modes and Credit Access: Digital payments are becoming popular because of innovations in payment systems and increased credit availability.
- Big Data Analytics for Payment Solutions: The case also shows how big data analytics integration improves payment solutions and customers’ experiences.
- Regulatory Support: New progressive regulations and policies are playing the role of enablers in payment innovation.
Digitization of Business Payments: This is complimented by the continuous advancement of business payments that are going digital.
Conclusion
The Indian digital payments are entering the phase of a major transition. UPI is already on the rise and with credit cards coming into the mix, digital payments seem to be the way forward. Technological advancements together with favorable policies as well as increased consciousness among consumers are expected to enhance India’s digital economy to the next level.
