The demonetization policy in India introduced in November 2016 had a massive impact on the country's economy, but it also helped in accelerating the growth of digital payments in the country. If you want to reap the advantage of this revolution, it's a good time to start your own payment gateway business now.

The concept of digital payments is unarguably one of the most important cornerstones of a financially inclusive country like India as the government brings every citizen of the country under an organized financial system. In recent months and years, the growth of digital ecosystem in India has been driven by many factors, including but not limited to:

• A universal digital identification program
• User-friendly, fintech-led digital products
• Growing merchant acceptance network
• Significant increase in the use of digital payment methods, such as mobile wallets, UPI, and card payments
• Disruptive innovations by fintech companies
• A regulatory push towards financial inclusion
• Cheap internet access
• Rapidly growing smartphone penetration
• Technology, innovation, and regulation working in tandem
• Exponential growth and adoption of digital payments
• The need for easy, contactless payments
• The Indian government’s push towards digitalization
• Tax incentives for businesses that adopt digital payment methods
• Subsidies for merchants to purchase point-of-sale terminals
• Reduce the dependence on cash transactions
• Idea of bringing more people under the ambit of formal banking and financial services
• State-of-the-art digital payment infrastructure
• Positive changes in the outlook and consumption patterns in the Indian market
• Changing consumer preferences due to rising disposable incomes

Let us now have a close look at some interesting statistics in the context of India's online payment market.

Interesting online payment market statistics of India

• The payment industry of India is expected to grow by a whopping 300 percent by 2025, with 2 out of every 3 transactions becoming online.
• The volume of UPI transactions grew by a staggering 275 percent to 83.7 billion between FY20-21 and FY22-23. UPI is expected to cross one billion transactions per day in India by FY26-27, according to consulting firm PricewaterhouseCoopers (PwC).
• The total transaction value in the Indian digital payments market is expected to reach US$200.30 billion in 2023 and US$370.50 billion by 2027.
• Digital transactions across different wholesale payment and retail channels between financial year 2020/21 (FY20–21) and FY22–23 grew by more than 2.5 times by volume to 113.9 billion and worth more than US$24.14 trillion.
• The number of mobile wallet users in India is expected to reach 900 million by 2025.
• The digital payment transaction value of India is more than the combined digital payments of developed countries like France, Germany, United Kingdom, and the United States of America.
• The next wave of growth in India's online payment market is expected to come from Tier 3-6 cities such as Bhatinda, Dehradun, Gangtok, and Sujangarh.
• The buy now pay later (BNPL) customer base in India for online and offline retail was 5 million and 2 million, respectively, in 2021. This is expected to surge 30 million for online retail and 22 million for offline retail in the year 2026.

Conclusion

India is all set to become one of the world's most successful digital payment economies in the near future. The introduction of technological advancements and innovative reforms are further accelerating growth of the Indian digital payments market at an unprecedented pace. It's no surprise that India that was previously referred to as a cash-based economy is now going ballistic with its out-of-the-box real-time digital payments.

A global leader in the fintech space, India is now ready to further disrupt traditional financial services. The time is not far when the digital payment landscape of India will be altered by leaps and bounds. When that happens, the process of financial inclusion in remote areas still somehow left untouched by internet connectivity will be accelerated like never before.

If you want your business to leverage the full potential of India’s growing success in the segment of digital payments market, it’s just the ideal time for you to start your own payment gateway business now. Call or email us now at ITIO Innovex, and our team of dedicated experts will reach out to you.