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UPI to remain on top; BNPL, digi currency to drive digital payments growth in next 5 years: Report

UPI to remain on top; BNPL, digi currency to drive digital payments growth in next 5 years: Report

BRAND-NEW DELHI: Retail online deal platform UPI will likely continue to dominate the digital payments space in the nation even as newer techniques such as BNPL and digital currency are expected to specify the future of payments, a study has actually stated.
Unified Payments User Interface (UPI), Purchase Now Pay Later On (BNPL), Reserve Bank Digital Currency (CBDC) and offline payments will drive development of digital payments in India in the next 5 years, PwC India said in a report.
UPI is expected to continue to be the major factor in the digital payments area, followed by BNPL, it said.
The Indian digital payments market saw consistent development at a CAGR of 23 percent (volume sensible), and is anticipated to reach 217 billion (21,700 crore) transactions in FY26 from 59 billion (5,900 crore) in FY22, stated the report titled ‘The Indian Payments Handbook— 2021-26′.
In 2020-21, UPI deals reached a record 22 billion (2,200 crore), and it is anticipated to reach 169 billion (16,900 crore) by 2025-26, growing at a CAGR (compounded yearly growth rate) of 122 per cent, it stated.
Collaborations with other countries in Asia to allow low-value transactions and cross-border remittances through UPI will contribute to this development. BNPL, which is currently estimated at Rs 363 billion (Rs 36,300 crore), is anticipated to reach Rs 3,191 billion (Rs 3,19,100 crore) by the end of 2025– 26, according to the report.
“We expect the payments market to focus greatly on improving client experience and offering consumer options for payment, enhancing security, carrying out developments in technology like dispersed ledger innovation (DLT) and emerging tech like IoT (Web of Things) over the next couple of years.
“With the efforts and efforts of key stakeholders such as regulators, banks, payment/fintech business, card networks and provider, the market is visiting incredible development in the coming years,” Mihir Gandhi, Partner & & Payments Change Leader, PwC India, said.
Providing a picture of the trends that will add to development of digital payments market in India, the report said that existing items and emerging usage cases such as UPI, Fastag, transit (NCMC) and cards will continue to make inroads and gain extra wallet share of the Indian customers. These techniques will continue to drive the growth in adoption and transactions numbers, said the report.
Enabling repeating payments and IPO subscriptions together with cross-border remittances will offer a boost to UPI. Parking and fuel payments are being explored as brand-new use cases for Fastag, PwC report said even more.
“The development of new players with a focus on digital journeys and broadening consumer base in tier 3 and 4 locations will drive the growth for cards. Combination of NCMC with debit and credit cards along with prepaid with news of public transportation operators going cope with approval facilities will bode well for the transit sector.”
Even more, it stated, with the RBI permitting to expand the scope of tokenisation to cover extra usage cases like laptops, desktops, wearables, IoT gadgets along with card-on-file tokenisation (CoFT), with enhanced card-related security, will make sure that the total client check-out experience stays intact.
This is significant for leading merchants in grocery and retail, food delivery and clothing, to name a few who experience duplicated purchase deals from their clients, said the report.
With regard to offline payments, PwC report said the recent RBI standards on offline payments have provided a much-needed motivation to the segment.
“Poor connection and absence of access to online payment approaches have opened up an opportunity for offline payments. Efforts have been made by different players in the past to establish and deploy such services but with limited success.”
They will provide the essential directions to the individuals in developing offline payments services. Even more, it will motivate banking and non-banking business to team up with the service designers, as per the report.
In the business payments space, financial organizations and service companies are providing payment services which can fulfil all the requirements of organisations and increase their operational efficiencies.
Integrating payments into enterprise resource preparation software application that helps to automate essential service functions, and using payments data to enhance operational performance and optimise vital processes are some of the use cases.
On the proposed CBDC, it said, provided the present circumstance, the reserve bank’s digital currency will need to co-exist together with the existing rails instead of change them.
“Some of the popular usage cases of CBDC that apply in the Indian context are programmable direct advantage transfer, online and offline retail payments and cross-border remittances,” it stated.

Published at Sun, 17 Apr 2022 06:38:18 +0000

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