The digital payments industry is expected to grow at a rate of 40% to reach INR 120,120 crore by December 2014. The digital payment industry was pegged at INR 85,800 crore in December 2013, according to the Digital Payments Report titled “INR 85,800 Crore Digital Money”, by the Internet and Mobile Association of India (IAMAI), Payments Council Of India (PCI) and IMRB, which was released yesterday.
The report further finds that there has been a compounded annual growth rate (CAGR) of 10% since 2010 till December 2013 in payments made through digital means. The modes used for making such payments are Credit/Debit card payments, payments through Net Banking and payments using Mobile Wallet, Pre-Paid Cash cards and Immediate Payment systems (IMPS) over the Internet and does not include remittances.
India Digital Payments Report 2014
According to the report, out of around 800 million online transactions made in 2013, nearly 53% of the transactions are made using Credit and Debit cards. The volume of online payments made through Credit cards is only 21% while Debit cards constitute 32% of the payments.
Online traveling, financial services and e-tailing are the main purposes for using different modes of digital payments. Online travel industry which include air and train ticket bookings, hotel accommodations and tour packages contribute nearly 60% of the Digital payments followed by Financial services (comprising of online mobile recharge and DTH service, Online tax filing, Payment of Insurance premiums,
Gas and electricity bills) and e-Tailing. Digital Downloads (including downloads of eBooks, Music, Movies, etc.) and other online services include websites for searching Jobs, Real Estate and Matrimonials contribute 4% and 2% respectively.
The report finds that the top 4 metros which include Delhi, Mumbai, Kolkata and Chennai are approximately 60% of the total Digital payment gateway market size. Next 4 metros – Bangalore, Hyderabad, Ahmedabad, Pune together contributes only 25% to the total market size.