According to a report titled “2023 Global Payments Report” from global financial technology leader FIS, as unified payments interface (UPI)-based transactions continue to shatter all records, India’s ecommerce market is projected to grow from $83 billion in 2022 to $150 billion in 2026, as cash transactions continue to decline.
FIS, a leader in global financial technology, reported in its “2023 Global Payments Report” that as of January 2023, UPI had the highest year-over-year growth in transaction volume at 74.1%, while UPI also played a role in the rise of digital wallets, which went from accounting for 5% of POS value in 2019 to 35% in 2022.
With the development of its next-generation real-time payments (RTP) infrastructure, India has become a worldwide leader in payments, with the use of cash dropping from 71% of POS transaction value in 2019 to just 27% in 2022.
The results revealed that UPI has assisted e-commerce account-to-account (A2A) payments to increase to $12 billion, up 53% from 2021 to 2022.
According to Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS, “UPI is positioning India as a leader in payments not only in the area but also globally.” UPI is encouraging clients to use other payment methods in addition to cash while also promoting financial inclusion.
He pointed out that other central banks’ development of real-time payment systems and, more importantly, their collaboration with one another are also promoting international commerce and providing enterprises with significant opportunities for future growth.
Although some peer-to-peer transactions still happen in cash, UPI is rapidly being used for the majority of them.
According to the estimate, cash transactions would be worth 34% less in 2026 than they are now, while digital wallet transactions will be worth 88% more.
Digital payments will benefit even more from the expected 82% growth in the size of the online retail industry by 2026.
In a statement delivered earlier this month, Shaktikanta Das, governor of the Reserve Bank of India (RBI), said that over the previous year, there had been a considerable rise in the number of payments made using UPI, with daily transactions topping 36 crores from 24 crore in February 2022. Valued at 6.27 lakh crore rupees, these transactions.
The Unified Payments Interface (UPI) was introduced in 2016, and since then, it has completely changed the payments environment. In January 2023 alone, there were nearly 803 billion transactions executed, totaling Rs. 13 lakh crore.
This has given rise to “anytime, anyplace” banking that goes beyond regular branch banking hours. According to Shaktikanta Das, the magnitude and effectiveness of India’s digital payments are demonstrated by the 1,050 crore retail digital payment transactions worth Rs 51 lakh crore that were handled in January 2023.
