India Payments Market Size (2024 - 2029)

The market size of the Indian payments sector is expected to grow significantly, driven by the rising adoption of digital payments, government initiatives, and a strong e-commerce sector. The market is transitioning from cash and debit card usage to digital payments, with widespread adoption of multiple payment products and systems. Government initiatives, such as digital India, are further encouraging the use of digital wallets and digital payments. The growth in digital payments is also driven by the introduction of innovative payment products, the need for faster payment modes, and a push from the government and regulators towards digital channels. The real-payment segment has seen substantial growth, with banks focusing on providing integrated solutions for payment systems. However, the increase in transactions has led to technical challenges, with the banking infrastructure struggling to handle the surge in volumes. The pandemic has further accelerated the move towards a cash-free society, with a rise in digital, app-based, and real-time payments.

Market Size of India Payments Industry

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India Payments Market
Study Period 2019 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 357.51 Billion
Market Size (2029) USD 814.43 Billion
CAGR (2024 - 2029) 17.90 %
Market Concentration Medium

Major Players

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*Disclaimer: Major Players sorted in no particular order

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Payment in India Market Analysis

The India Payments Market size is estimated at USD 357.51 billion in 2024, and is expected to reach USD 814.43 billion by 2029, growing at a CAGR of 17.90% during the forecast period (2024-2029).

The primary factor driving the growth of the market in the region is the rising adoption of digital payments supported by government initiatives and strong growth in E-commerce, among others.

  • The Indian payments market is evolving from cash as the primary mode of payment and usage of debit cards being limited to cash withdrawals to the digital payments system. The Indian payment market has evolved to widespread adoption of multiple payment products and systems like Prepaid Payment Instruments (PPIs), Quick Response (QR) code, Immediate Payment Service (IMPS), real-time payment system Unified Payments Interface (UPI), and Aadhar enabled Payment Service (AePS).
  • Various initiatives by the Government of India, such as digital India, are further driving the adoption of digital wallets and digital payments in the region. Also, as per Union Budget 2022-23, to boost India's digital economy, the Reserve Bank of India (RBI) will be launching the Central Bank Digital Currency (CBDC) as India's official digital Rupee, which is further expected to strengthen the Indian payments market.
  • Moreover, growth in digital payments in the region has been primarily driven by factors such as the launch of new and innovative payment products by the payment companies, the rising need for faster payment modes, and a strong push from the Government and regulators toward the adoption of digital channels.
  • The Indian real-payment segment continuously witnessed substantial growth over the past few years. The Immediate Payment Service (IMPS) from the National Payment Corporation of India (NPCI) drives an ever-expanding suite of API-overlay services through the UPI. The Unified Payments Interface (UPI) is a payment system that powers various bank accounts into a single mobile application, merging several banking features, seamless fund routing and merchant payments into one hood. It also caters to the peer-to-peer collection request, which can be scheduled and paid as per requirement and convenience. Furthermore, Buy Now Pay Later real-time payments services have been rising for the past few years in the region.
  • Banks are now more focused on providing integrated solutions for payment solutions to their consumers. Digital payments systems have evolved from being viewed as a cost center for banks to a revenue center and a key parameter for customer acquisition. Many banks in the region have introduced their own digital payment app to gain more customer acquisition, such as BHIM Axis Pay, Yono by SBI, HDFC PayzApp, Pockets By ICICI Bank, etc.
  • However, failed transactions are increasing with the rising number of transactions and technical declines in the region. The rise in UPI payment transactions also tests the banking infrastructure and technological systems, which are not adequately equipped to handle the surge in volumes. The Reserve Bank of India, with the NPCI, is pushing the banks to reduce technical failures and work on a real-time system for handling customer complaints.
  • During the COVID-19 pandemic, India has seen lockdowns across the country and cash payments declined during this period. However, even before the pandemic, the country was moving towards a cash-free society, and the pandemic further proliferated the move. Digital payments, app-based payments, and real-time payments grew in the region to avoid the physical contact spread of the virus during the outbreak.

Payment in India Industry Segmentation

The Indian payments market is segmented by mode of payment (point of sale (card payments, digital wallet, cash), online sale (card payments, digital wallet)), and by end-user industries (retail, entertainment, healthcare, hospitality). E-commerce payments include online purchases of both goods and services, such as purchases made on e-commerce websites and online booking of travel and accommodation. The scope of the market excludes online purchases of motor vehicles, real estate, utility bill payments (such as water, heating, and electricity), mortgage payments, loans, credit card bills, or purchases of shares and bonds. As for Point-of-Sale, all transactions that occur at the physical point of sale are included in the scope of the market. It includes traditional in-store transactions as well as all face-to-face transactions, regardless of the location of the transaction. Cash is also considered for both cases (cash-on-delivery for e-commerce sales).

The study tracks key market metrics, underlying growth influencers, and significant industry vendors, providing support for market estimates and growth rates in India throughout the anticipated period. The study looks at COVID-19's overall influence on the Indian payment ecosystem.

By Mode of Payment
Point of Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Cash
Others
Online Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
By End-user Industry
Retail
Entertainment
Healthcare
Hospitality
Other End-user Industries

India Payments Market Size Summary

The Indian payments market is experiencing significant growth, driven by the rising adoption of digital payments, government initiatives, and the robust growth of E-commerce. The market, which is moving away from cash as the primary mode of payment, has seen the widespread adoption of multiple payment products and systems such as Prepaid Payment Instruments (PPIs), Quick Response (QR) code, Immediate Payment Service (IMPS), and the real-time payment system Unified Payments Interface (UPI). Government initiatives like digital India are further driving the adoption of digital wallets and digital payments in the region. The Reserve Bank of India (RBI) is also expected to launch the Central Bank Digital Currency (CBDC) as India's official digital Rupee, which will further strengthen the Indian payments market. The growth of E-commerce and M-commerce is projected to drive the payments market in India. Digital payments are emerging as the preferred E-commerce payment method, with local digital wallets such as Paytm, MobiKwik, and PhonePe competing for market share. Real-time payment services like Buy Now Pay Later are also becoming popular payment checkout solutions. Furthermore, the adoption of mobile commerce has been on the rise, aided by increased smartphone ownership and the variety of payment checkout solutions available. The real-time payment systems segment, particularly UPI, is expected to gain significant traction due to its convenience and security. Major players in the Indian payments market, such as Visa Inc., Mastercard Inc., Phonepe Pvt Ltd., Google Pay, and Rupay, are adopting strategies like acquisitions and partnerships to expand their reach.

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India Payments Market Size - Table of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Market Overview

    2. 1.2 Industry Stakeholder Analysis

    3. 1.3 Industry Attractiveness-Porter's Five Force Analysis

      1. 1.3.1 Bargaining Power of Suppliers

      2. 1.3.2 Bargaining Power of Buyers/Consumers

      3. 1.3.3 Threat of New Entrants

      4. 1.3.4 Threat of Substitute Products

      5. 1.3.5 Intensity of Competitive Rivalry

    4. 1.4 Evolution of the payments landscape in India

    5. 1.5 Key market trends pertaining to the growth of cashless transaction in India

    6. 1.6 Impact of COVID-19 on the payments market in India

  2. 2. Market Segmentation

    1. 2.1 By Mode of Payment

      1. 2.1.1 Point of Sale

        1. 2.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 2.1.1.2 Digital Wallet (includes Mobile Wallets)

        3. 2.1.1.3 Cash

        4. 2.1.1.4 Others

      2. 2.1.2 Online Sale

        1. 2.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 2.1.2.2 Digital Wallet (includes Mobile Wallets)

        3. 2.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)

    2. 2.2 By End-user Industry

      1. 2.2.1 Retail

      2. 2.2.2 Entertainment

      3. 2.2.3 Healthcare

      4. 2.2.4 Hospitality

      5. 2.2.5 Other End-user Industries

India Payments Market Size FAQs

The India Payments Market size is expected to reach USD 357.51 billion in 2024 and grow at a CAGR of 17.90% to reach USD 814.43 billion by 2029.

In 2024, the India Payments Market size is expected to reach USD 357.51 billion.

Payment Industry in India Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)