India remains a cash-driven economy, and stands as the second-largest consumer market globally. Cash accounts for 96.8% of total payment transaction volume. This is due to a lack of adequate banking infrastructure, limited awareness of electronic payments, and low acceptance at retailers. The share of cash is anticipated to fall gradually over the forecast period (2017-2021), as a result of initiatives by the central bank such as measures to tackle “black” money, cuts in interchange fees, and the appointment of banking correspondents in the rural areas to increase financial awareness.
Indian government decided to withdraw INR 500 and INR 1,000 notes as legal tender from midnight of November 8, 2016; these are now being replaced with new notes. This step is expected to have three major impacts: most high-value transactions will now be carried out electronically, low-value retail transactions traditionally made using cash will be partially replaced by digital wallet payments, and there will be a broad overall change in consumers’ mindset and payment habits.
E-commerce market in India grew due to rising online and mobile penetration, increasing consumer confidence around online transactions, and the growing presence of online gateways. The fast-growing e-commerce market is acting as a driver of payment card market growth, with credit and debit cards accounting for 25% of the total e-commerce transaction value. Emerging payment methods such as digital wallets, mobile wallets, and carrier billing are also being increasingly used for online purchases.
The Indian government is developing programs to better serve the unbanked, and is insisting that banks do the same. One such initiative is the government’s launch of the Pradhan Mantri Jan-Dhan Yojana (PMJDY) program in August 2014 to increase financial inclusion. Banks and scheme providers such as Visa, Mastercard, and RuPay are striving to increase awareness levels of the benefits of electronic payments. Since its launch, more than 500 million accounts have been opened as of March 31, 2017.
The report 'Payments in India 2017: What Consumers Want', examines the consumer payments market in India, considering payment cards, online payments, P2P payments, and newer payment technologies such as mobile wallets and contactless.
In particular, this report provides the following:
- Analyzes consumer attitudes to financial services by lifestage.
- Analyzes the major payment card types in terms of both card holding and usage.
- Identifies the major competitors in card issuing and how their position in the market has changed over the last five years.
- Considers consumer attitudes towards P2P tools, mobile payment tools, and contactless cards, and how companies in India are deploying these tools to meet customer needs.
- Explores the online payment market in India by merchant type and payment tool, as well as providing a five-year forecast for the development of the market.
- Banks in India are migrating from magnetic stripe to chip and PIN to make debit cards more secure.
- RuPay was launched in March 2012 by the National Payments Corporation of India (NPCI) as an alternative to the international card schemes.
- To provide a single platform for all online transactions, NPCI developed an online payment solution, the Unified Payments Interface, which became operational in August 2016.
- Understand the key facts and figures in the consumer payments market in India.
- Learn what trends drive consumer behavior at the macro level and plan your strategy accordingly.
- Find out what products the major competitors are launching in the market.
- Discover consumer sentiments towards various payment tools in the Indian market and use this knowledge to inform product design.
Payments Infrastructure & Regulation
- State Bank of India
- Axis Bank
- Bank of India
- HDFC Bank
- ICICI Bank
- Union Bank of India
- Bank of Baroda
- Canara Bank
- IDBI Bank
- IndusInd Bank
- Standard Chartered Bank
- American Express