Growth in small value transactions using digital payments will power Digital India.
Times of India reports that fuelled by rise in smartphone penetration and adoption of mobile wallets by small offline merchants, the Indian digital payments market is set to grow by 10 times in the next four years to be $500 billion or 15% of the country's GDP, says a report jointly by Google and the Boston Consulting Group. By 2020, the country's Internet user base will reach 500 million, and half of them will make digital transactions, the report said.
India's digital payments revolution is being led by mobile wallets enabling micro-payments in a country where bank accounts are still a big deal. The Google-BCG report said that over 50% of person-to-merchant transactions was expected to be under Rs 100. Over 60% of digital payments value is expected to be contributed by offline points of sale such as unorganized retail, eateries and transport.
Rajan Anandan, MD of Google India and South East Asia, said, "Supported by progressive regulatory policy, the digital payments industry is at an inflection point and the top 100 million users will drive 70% of the gross merchandise value -- a clear indicator of the growing importance of the digital consumer." The report also predicts that the value of remittances and money transfer that will pass through alternate digital payment instruments will double to 30% by 2020.