India Country Report

Table of Contents

A comprehensive overview of the cards, payments and consumer banking market in India.

What you will learn from this report:

• How the government and central bank is working to stimulate digital payments.
• What alternative digital payment options are rapidly gaining ground.
• Who the new P2P players entering the market are and how they pose a threat to market leader Paytm.
• How the credit card market could be set for rapid expansion.
• How QR codes are set to revolutionise payment acceptance in India.

India Cards and Payments Key facts

• India is arguably the fastest growing payments market globally, yet massive untapped potential remains as the population migrates to non-cash payments.
• Cash remains an important component of the Indian economy, but digital payments are growing rapidly with alternative acceptance infrastructures being rolled out to support them.
• The government and RBI have been aggressive in their promotion of digital payments, putting regulation and infrastructure in place to stimulate the market.
• The government's latest proposal, to abolish merchant fees for digital payments is designed to stimulate the market further but could equally discourage investment with a key revenue source

removed.

• Advances in the payments infrastructure such as the Unified Payments Interface (UPI) has enabled mobile payments to develop rapidly.
• POS terminal penetration remains low despite strong growth, but a focus on QR code acceptance is allowing for broader non-card payment acceptance, pulling smaller merchants into the digital payment fold.
• The country's credit cards market is small but is set for rapid expansion as banks and new players such as Paytm look beyond the small affluent segment.
• RuPay debit has successfully challenged the global networks but it remains to be seen if it can repeat its success in credit cards.
• Debit cards are still mainly used for cash withdrawals but overtook credit card purchase volume in 2017 and are also increasing healthily in online spend.
• Competition in the digital payments space is heating up. Paytm remains the largest mobile wallet and P2P provider in India, but it is not insulated from competition.