Digital payment ecosystem in India

Demonetization and the government’s push towards digital payments has opened the market to several platforms which are not only more convenient but also provide greater flexibility to the people using them.

Digital payment ecosystem in India

• As per a study prepared by the Assocham-PWC India, it is expected that India will see the fastest growth in digital payments? transaction value between 2019 and 2023, with a Compounded Annual Growth Rate of 20.2%
• The study also claimed that India?s share in worldwide transaction value by digital payments will increase from 1.56% to 2.02% in the next four years
• Some well established digital payment brands in India are Google Pay (formerly known as Tezz), BHIM.
• The key factors which spurred the growth of digital transactions in India are the demonetization and complimentary discounts on mobile wallets and UPI transactions.
• Also, a key accelerator in the growth was the funding received from a diverse set of domestic and international stakeholders.
• On the technical front, innovation in payments technology which used novel AI, blockchain, the Internet of Things (IoT) and real-time payments (RTP) contributed to growth.
• The widespread proliferation of the mobile point of sale (POS) devices to many small and medium scale vendors has also contributed to the growth of digital payments in India.
• The study claims that the regulatory breaks and the early successes of pioneer wallets (PayTM etc) of non banking players enhanced the digital landscape in the country in the past three years.

Why is it in the news?

Watsapp is planning to launch a payment service in India. To comply with the RBI guidelines, it plans to establish a data center in India to store all data in Indian sovereign territory.