Digital Payments in India: A US$10 Trillion Opportunity

Ruchin Goyal Prateek Roongta Vivek Mandhata Tapas Gandhi Gaurav Jha Nikita Lewis

India’s digital payments landscape has transformed dramatically over the past five years and is set to become a digital payment economy. This report, published in collaboration with PhonePe, provides a detailed outlook on the factors accelerating the growth of digital payments in India, shifting consumer behavior towards contactless payments, perspective on game-changing initiatives, and the progression from embedded payments to embedded finance, thus unlocking a significant change in access to credit for small merchants due to the creation of a digital transaction trail.

The report forecasts the digital payment market to more than triple to $10 trillion in the next five years, with non-cash contributions constituting nearly 65% of all payments, wherein 2 out of 3 transactions will be digital in the next five years as opposed to 2 out of 5 transactions today. Merchant payments will emerge as the most powerful driver of this growth, outpacing person-to-person fund transfers. The report provides a detailed outlook on the critical imperatives that stakeholders need to take to strengthen the country’s digital infrastructure in order to unlock the potential of digital payments in India.