By 2023, digital wallets are expected to surpass cash, becoming India’s leading payment method
For customers around the globe, e-commerce payment preferences continue to shift away from cash and credit cards towards digital wallets and Buy Now, Pay Later (BNPL). India’s e-commerce market is expected to increase 96 percent to $120 billion USD between 2021 and 2015, according to the 2022 Global Payments Report (GPR) by Worldpay from FIS. The GPR examines current and future payments trends, along with future projections for payment method shares as well as market size.
With advancements in technology and digitalisation in India, there has been a significant rise in the adoption of cashless payments. Prepaid cards, bank transfers and cash on delivery market shares are in decline and are projected to collectively comprise just 8.8 percent of e-commerce transaction value by 2025 as per the report. Digital wallets (45.4 percent) followed by debit cards (14.6 percent) and credit/charge cards (13.3 percent) were the leading e-commerce payment methods in 2021. With their superior checkout solutions, flexibility in underlying payment methods, anchor role in e-commerce marketplace ecosystems and local wallets consolidating into regional and global super apps, digital wallets are expected to grow globally. In India, they are projected to extend their lead over other e-commerce payment methods through 2025, when they are projected to account for 52.9 percent of transaction value.
India’s Point-of-Sale (POS) market is projected to increase by 28.8 percent between 2021 and 2025 when it will surpass US$1.08 trillion. Cash was the leading in-store payment method in 2021 with 37.1 percent of transaction value, followed by digital wallets (24.8 percent), and credit/charge cards (18.1 percent). However, digital wallets are projected to overtake cash as the most popular in-store payment method by 2023 when they are projected to account for 30.8 percent of POS transaction value.
Additionally, the report states that BNPL is India’s fastest-growing online payment method. BNPL services, which allow consumers to pay for goods and services, either through a one-time invoice or a finite set of instalments are projected to rise to 8.6 percent of e-commerce market value by 2025, up from just 3 percent in 2021.