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India Country Report

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  • Published Date: April 2021

INDIA CARDS & PAYMENTS MARKET TRENDS

A comprehensive overview of the cards, payments and consumer banking market in India, with clearsighted commentary backed by relevant data.
Although the Unified Payments Interface (UPI) is the fastest-growing domestic payment platform worldwide, it is about to enter a new era, sharing an expansionist ecosystem with some of the world's biggest tech and payments companies, currently in contention for the right to operate a second – and perhaps even a third – service in conjunction with local players.
Zero MDR and QR interoperability rulings from the central bank are both having a pronounced effect on payments, though cash is still very present and gained renewed appeal for many during 2020 as hoarding became widespread.
India remains ahead of the curve in its region, though market entrants would do well to remain flexible as policy upheavals have become a feature.

What you can learn from this India cards & payments report:

  • How cash has fared through a turbulent half-decade
  • What regulatory moves have counted and why
  • Which innovations are transforming the POS
  • Changes to payments behaviour wrought by Covid
  • Why credit cards may be set for uplift

INDIA CARDS & PAYMENTS REPORT | KEY FACTS

  • Cash use had been slowly declining (with digital payments rising), but pandemic-induced cash hoarding caused circulation to soar.
  • Use of mobile payments is growing rapidly with QR codes the prevalent technology for POS payments.
  • The Unified Payments Interface (UPI) transacted over 1.3 billion transactions a month in 2020 and is recognised as the fastest-growing payment platform in the world.
  • E-commerce's growth trajectory means that India's e-commerce market could reach $200 billion by 2026 to become one of the world's largest, behind China and the US.
  • UPI's growth is dampening the cards market, which has been developing innovative products to integrate into the evolving payments ecosystem.
  • The number of credit cards in issue has doubled over the last four years, but penetration remains low at six cards per 100 adults.
  • Usage of instalment payment options has soared since the pandemic hit, with job losses and salary cuts fuelling demand.
  • A controversial zero Merchant discount rate policy was introduced in January 2020 for all RuPay debit cards and UPI-based payments.
  • This has been fiercely contested by the payments industry as the economics of the acquiring business model are threatened.
  • All proprietary, closed-loop QR codes are to be phased out by March 2022 in favour of interoperable, open-loop QR codes such as BharatQR and UPI QR.

India Payments Research | Report Contents

Key Topics
Demographics and the economy
Payments environment
India cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Card Market Data

Appendix I: Demographics and the economy

  • Demographic and economic indicators
  • Ownership of key consumer devices
  • Internet usage by population

Appendix II: Card payments environment

  • Access points
  • Account penetration
  • Consumer payment trends
  • B2C e-commerce payment methods

Appendix III: Cards market

  • Total cards payment metrics
  • Contactless cards metrics
  • India credit card data numbers
  • Total credit cards metrics
  • Credit cards profitability indicators
  • Debit cards numbers
  • Debit cards metrics
  • Appendix IV: Mobile payments
  • Mobile proximity payment metrics
  • Mobile P2P payments

Appendix V: Profit pool

  • Profit pool

Appendix VI: The card networks

  • Networks' credit card market shares
  • Networks' credit card numbers
  • Networks' credit card billed volume
  • Networks' number of credit card transactions
  • Networks' average credit card transaction value
  • Credit card interchange fees by network
  • Networks' debit card market shares
  • Networks' debit card numbers
  • Networks' debit card billed volume
  • Networks' number of debit card transactions
  • Networks' average debit card transaction value
  • Debit card interchange fees by network

Appendix VII: Key retail banks and issuers

  • Key credit card issuers market shares by credit card numbers
  • Key issuers market shares in credit card outstandings
  • Key debit card issuers market shares by debit card numbers

Appendix VIII: Acquiring and processing

  • Merchant acquirer credit card market share
  • Credit card merchant service charges
  • Merchant acquirer debit card market share
  • Debit card merchant service charges
  • Credit card issuer/issuing processor relationships
  • Credit card acquirer/acquiring processor relationships
  • Credit card issuing processor market shares by card numbers
  • Credit card acquiring processor market shares by the number of POS transactions

Appendix IX: Online acquiring

  • Online merchant acquirer market share

India Country Report | Selected Extracts

Demographics and Economy
With an average annual population growth rate of 1.13%, India is projected to become the world's most populous country, overtaking China, by 2024. The population is estimated to reach almost 1.4 billion by the end of 2021.

Payments Environment
India is home to one of the world's most vibrant and fast-moving payments markets. A massive population, coupled with governmental determination to reduce cash use, has created a fascinating arms race between banks, networks and technology companies.

Payment Cards Market
The use of payment cards has been growing in the country as understanding of the payment structure and consumer confidence in card use increases, more POS and ATM access points appear, and fees are lowered.

Mobile Payments
The surge in the number of mobile phone and internet users indicates that the digital payments market has huge potential – a potential that is already being tapped.

Profit Pool
With the exception of a small number of private sector and foreign banks, credit cards have not traditionally been a big focus for banks in India. This is changing though, as financial inclusion, technology, growth in digital payments and economic uplift are creating a much larger potential customer base.

Card Networks
Visa and Mastercard continue to be the two primary networks in India moving into 2021, with a combined estimated market share of 93 percent of credit cards in issue by the end of 2021. India's domestic cards payment network RuPay's market share in terms of card numbers grew from 27% at the end of 2016 to an estimated 73% in 2021.

Key Retail Banks and Issuers
Great structural shifts in the banking and finance sector caused by the evolving interconnectivity between traditional banks and non-banks are currently underway.

Acquiring and Processing
Traditional POS terminals are quickly becoming obsolete in such a fast-paced market ... As the regulator is so keen on ensuring a high acceptance rate of non-cash options, particularly among smaller merchants in rural areas, the push for alternative POS terminals is gathering momentum.

Online Acquiring
(Much like the acquiring space, it is widely expected that online acquiring will become a hub of collaborations and partnerships
as advancements in technology and payment products should prove difficult for the retail banks to keep up with independently.

Regulatory and Markets Information
Most significant was the proposal to establish an independent body, separate from the RBI, called the Payments Regulatory Board, with executive powers to determine standards. The hope is that this new regulator will provide non-banking payment providers with equal opportunities to compete.

India Payments Trends | Entities Referenced

Aadhaar Pay
Aadhar
Accenture
Aditya Birla Ideas Payment Bank
AEBC
Air India
AirAsia
Airpay
Airtel Payments Bank
Allahabad Bank
Amazon Pay
Amazon
American Express
Amex
Andhra Bank
AnyPay
Apollo
Atlantis
Atos Worldline India
Axis Bank
BabyOye
Bajaj Finserv
Bank for International Settlements
Bank of Baroda
Bank of India
Bank of Maharashtra
BBPS
Bharat Bill Payment System
BharatQR
BHIM
BHIM Axis Pay
BIS
BOB Financial Solutions
BookMyShow
BPCL
Canara Bank
Carlyle Group
Cashfree
CBDT
CCAvenue
Central Board of Direct Taxes
Central Stores
Citibank
Citrus
DailyHunt
Delhi Metro
Digital India
Diners Club
Discover
Eazypay
E-Billing Solutions
EBS
Emvantage
EnKash
ePaisa
Etihad
Ezetap Mobile Solutions
Facebook
Federal Bank
Ferrari
Financial Software and Systems
Financial Stability Development Council
Fino Payments Bank
First Data
FirstCry
FIS
Fiserv
Flipkart
FreeCharge
FSDC
FSS
GE Capital
Glance
Goibibo
Google
Google Pay
HDFC
Hitachi Payment Services
HSBC
ICICI
ICICI Merchant Services
ICICI Pockets
IDBI Bank
IKEA
IMF
Immediate Payment Service
iMobile Pay
IMPS
IMS
India Post Payment Bank
Indian Oil
Indian Overseas Bank
Indian Railway Catering and Tourism Corporation
IndusInd Bank
ING Vysya Bank
Ingenico
Innovation Fund
Instamojo
International Monetary Fund
International Telecommunication Union
IRCTC
ITU
Jabong
Jan Dahn Yojana
JCB
JDY
Jet Airways
Jio
Jio Pay
Jio Payments Bank
Juno Payments
JusPay
Karnataka Bank
Karur Vysya Bank
Kotak Mahindra Bank
Lakshmi Vilas Bank
Life Insurance Corporation of India
Make in India
MakeMyTrip
Manchester United Football Club
Mastercard
Mobikwik
M-Pesa
Mumbai Indians
Naspers
National Common Mobility Card
National Electronic Funds Transfer
National Electronic Toll Collection System
National Payment Corporation of India
NCMC
NEFT
NETC
New Umbrella Entity
NPCI
NSDL Payments Bank
NSFI
NUE
Office of the United States Trade Representative
Ola
Ola Money
Online Prasad
Oriental Bank of Commerce
Payments Regulatory Board
Paytm
Paytm Payments Bank
PayU
PayUbiz
PayUmoney
PayZapp
PayZippy
PhonePe
Pine Labs
Practo
Pradhan Mantri Jan Dhan Yojana
Pulse
Punjab National Bank
Ratnakar Bank
Razorpay
RBI
RBL Bank
Real Time Gross Settlement System
Royal Bank of Scotland
RTGS
RuPay
Saraswat Bank
SBI
SBI Card
Skill India
Snapdeal
South Indian Bank
Standard Chartered
Start-up India
State Bank of India
Swadhaar FinServe
Swiggy
Tata
TechProcess Payment Services
Tez
The Reserve Bank of India
TikTok
Transecute
Uber
Unified Payments Interface
Union Bank of India
UnionPay
UPI
UrbanClap
USTR
Venture Infotek
Visa
Vodafone
Walmart
WhatsApp Pay
Wibmo
Wirecard
World Bank
Worldline
Yatra
Yes Bank
Yono
Zaakpay
ZestMoney
Zomato

MORE ASIA-PACIFIC CARDS & PAYMENTS REPORTS

Verisk reports deliver market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit in the Asia Pacific region. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and Asia Pacific experts.

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