According to Transactions 2025 – a recent white paper authored by ACI Worldwide (a real-time electronic payments and banking solutions provider) and AGS Transact Technologies (an end-to-end payment solutions company in India) – India’s payments ecosystem is undergoing rapid transformation.
As PaymentFacilitator.com has previously reported, financial inclusion in India and the surrounding countries is a fertile landscape for digital commerce and the role PFs play in facilitating this market shift.
The white paper projects that 2025 could see four out of every five transactions being made digitally – with Unified Payments Interface (UPI) being a key driver. Also encouraging India’s drive towards digital are the regulatory policies to help maintain a standard and a thriving fintech scene, according to the press release.
Some of the key findings from the research include:
- India’s smartphone user base is expected to double to 500 million by 2020.
- As projected by the current trajectory, India’s digital payments could be worth $1 trillion annually by 2025.
- India’s user base for digital transactions (currently close to 90 million) could triple to 300 million by 2020.
What’s driving the rapid growth? As data and smart devices become increasingly affordable, this will encourage a spike in digital commerce.
The company also suggests that better safeguards such as biometrics and multi-factor authentication will improve transaction security, while new users from outside urban areas are expected to enter the market due to the increasing accessibility and popularity of the technology.
“India is undergoing an incredible transformation driven by the rapid digitalization of payments,” said Vice President ACI Worldwide Manish Patel, via the same release. “The findings of our new research reinforce our view that flexible, scalable and reliable technology will be critical to the future of payments in India as the market continues to experience incredible growth.”
The payment facilitator model in particular boasts an extremely cost-effective and efficient system to underwrite, enroll and manage smaller merchants. As financial inclusion continues to gain traction and digital continues to drive the marketplace, the PF model continues to establish its credibility and provide necessary support for this rapidly evolving payments infrastructure.