The Secret Times, Crypto, Bitcoin, Business News.
Worldwide Financial Analysis, Economics, cryptocurrency, Bitcoin, Forex, Technical Analysis, Digital Asset, Money, Stock Market, Block chain, indices

Cash no longer the king: 65% transactions to be digital by 2026, says BCG-PhonePe report

The habit of carrying your wallet while making purchases may soon be replaced by carrying your phone, as consumers continue to go cashless, findings of a recent study suggest. According to a report jointly released by Boston Consulting Group (BCG) and PhonePe, 65 per cent of all transactions, or two of every three transactions, in terms of value, are expected to be digital by 2026.

India’s digital payments market is at an “inflection point” and is expected to more than triple to $10 trillion by 2026 from the current level of $3 trillion, the report said. This growth would be driven by increase in merchant payments, it added, as more and more merchants shift to QR (quick response) based payments in offline sales. The findings of the report exclude B2B (business-to-business) and G2B (government-to-business) transactions.

India’s digital payments landscape has transformed dramatically over the past five years on account of rapid expansion in digital infrastructure, UPI-led migration to digital, pandemic-led acceleration of shift in customer preferences, growing merchant acceptance network and disruptive innovations by fintechs, the report said.

UPI to lead non-cash payments

So far, UPI has ‘supercharged’ India’s transition to non-cash payments, especially in person-to-person (P2P) fund transfers and low value merchant (P2M) payments, the report said. UPI is expected to drive three-fourth of total non cash transactions in five years, according to the findings of the report. In the last three years transaction volume through UPI has jumped nine times to 46 billion transactions in FY22.

However, alongside the potential of digital transactions, there is also a need to address fraud management, simplify digital onboarding and KYC, reduce strain on tech infrastructure of banks, allow better economics for payment players and strengthen the country’s digital infrastructure, the report said.

‘Underpenetrated’ Tier 3-6 cities to drive growth

Currently the tier 3 cities and beyond and India’s vast rural heartlands remain underpenetrated, the report said, adding that there is a significant scope for growth in those regions.

“While Tier 1-2 cities have witnessed high acceptance of digital payments, penetration in Tier 3-6 cities shows headroom for growth. The next wave of growth will now come from Tier 3-6 locations, as evidenced in the past two years wherein Tier 3-6 cities have contributed to nearly 60-70% of new customers for PhonePe,” Karthik Raghupathy, Head of Strategy, and Investor Relations at PhonePe said.

There are currently about 30 million B2C (business-to-consumer) merchants who accept QR code payments at POS and this number is expected to increase to cover about 40 million merchants, according to the report.

Get real time updates directly on you device, subscribe now.

Comments are closed.

Your cart is currently empty.