Mobile Payments Grew 163% In India, With $287 Billion Transacted In 2019
ATM withdrawals are reducing, as more Indians welcome mobile payments.
India shifted to online transactions in a big way after the 2016 demonetisation decision that shook the nation.
People shifted to UPI based payment methods and cards switched from being a medium to withdraw cash to being a medium to directly transact at stores.
Reuters
And now, a report has revealed that in 2019, mobile payments done by apps, account to account transfers etc in India rose by 163 percent, amounting to $287 billion in 2019. This is according to a report by S&P Global Market Intelligence on Tuesday dubbed ¡®The Indian Mobile Payments Market Report.¡¯
The report also revealed that the point-of-sale transactions completed using debit and credit cards, including online and in-app spiked to 24 percent, amounting to $204 billion.
Mobile payments are a popular choice
The report stated, "While a large number of transactions handled by payment apps include peer-to-peer transactions, mobile phone account recharges and utility bills, mobile payments are increasingly becoming a popular payment choice for retail transactions at the point of sale and online."
Reuters
ATM withdrawals have dropped
The report also sheds light on the fact that ATM withdrawals have dropped lower than mobile and card-based payment methods in 2019.
Moreover, for each ATM withdrawal, Indians made more than two transactions using either cards or mobile phones.
COVID-19 Impact
However, analysts claim that this spike in mobile transactions won¡¯t be seen again anytime soon, due to the economic slowdown caused by the pandemic.
Sampath Sharma Nariyanuri, S&P Global Market Intelligence Fintech Analyst, however, feels that mobile payments will take a bigger lead in comparison to card-based transactions, stating, ¡°We expect mobile payments to be more resilient and will gain a bigger lead over card payments, as their uptake will accelerate due to ongoing social distancing measures and concerns over usage of cash and plastic."
The growth of card and mobile transactions in 2019 was in tandem with the percentage of GDP rising 20 percent in the quarter that ended in December 2019, from 13 percent in December 2019.
Reuters
UPI-based digital payment grew
The report also shed light on the success of UPI based transactions stating, "UPI processed nearly 11 billion transactions in 2019. Based on a monthly rate of $31 billion in February, UPI payments are currently clocking more than $373 billion annually in 2020."
Other solutions developed on top of India's UPI have also played their part in the rise of mobile-based payments in the country, the report claims. "Payment apps like Google Pay and PhonePe (which are based on UPI) handled over 7 billion transactions in the year 2019," according to the S&P report.