Google News
spot_img

Transactions worth US$ 270 bn to shift to cards/ digital in India by 2030

Must Read

The rapid shift to digital payments due to the COVID-19 pandemic is urgently increasing the need for banks to modernise their payment systems, according to a new report from Accenture.
The report, titled ‘Playing the Long Game in Payments Modernisation,’ is based on a survey of 120 payments executives at banks globally regarding the transformation of their payments business, as banks make multi-year investments to compete with non-bank digital-payments providers and comply with new regulations.
In the report, the global professional services company forecasts nearly 420 billion transactions worth US$ 7 trillion globally are expected to shift from cash to cards and digital payments by 2023 – and increase to US$ 48 trillion by 2030.
In India, 66.6 billion transactions worth US$ 270.7 billion are expected to shift from cash to cards and digital payments by 2023 – and increase to US$ 856.6 billion by 2030.
The rapid move to digital payments has put additional pressure on banks, with three-quarters (75 percent) of surveyed bank executives saying that the pandemic has increased the urgency of their plans to modernise payment systems, Accenture said.
“COVID-19 has accelerated the shift to digital payments at a pace banks could not have predicted,” said Sulabh Agarwal, who leads Accenture’s Payments practice globally. “The pandemic will permanently change how consumers shop and pay for products as they prioritise convenience above all else. While banks’ investments in new payments systems have focused primarily on meeting compliance deadlines, the way they will drive value moving forward is by embracing the changing consumer dynamic and improving the customer experience.”
Sonali Kulkarni, Lead – Financial Services, Accenture in India, said: “While India has been ahead of the curve in terms of real-time digital payments infrastructure driven by UPI and 24×7 NEFT, the pandemic has led to a further increase in digital, contactless payments as consumer behavior has undergone a shift. With newer players launching their payments offerings and increased uptake of ‘Buy Now Pay Later’ schemes, consumer experience and convenience is bound to improve significantly.”
The Accenture survey finds three quarters (75 percent) of banks see payments modernisation as being driven by national payments infrastructure changes and regulation, which include improving bank-to-bank payments systems, new industry standards with ISO20022 and Open Banking.
The rapid shift to digital payments differs across countries, depending on the rate of cash decline, adoption of e-commerce and how active Big Tech companies are in providing payment services.
Using Accenture’s Payments Disruptability Index, which measures current and future levels of disruption for the payments industry, the report notes that disruption is highest in the US, closely followed by the UK, as consumers opt for new ways to pay and non-banks seize the opportunity to provide payments services.
In China, mobile wallets are rapidly displacing cash payments – 76 percent of transactions in 2019 originated from mobile wallets, up from 12 percent in 2014 – as consumers in China have already been accustomed to using mobile apps and QR codes to pay at restaurants and stores for several years.
“COVID-19 has caused consumers to be more open to digital financial transactions, and this shift will increase competition as alternative payments providers vie for market share,” said Alan McIntyre, who leads Accenture’s Banking practice globally.
“The e-payments opportunity for banks varies greatly by market and depends on the maturity of the transition to digital payments The greatest opportunity will be in markets like Southeast Asia and Latin America, where cash usage has dominated and, in some regions, even increased during the pandemic.”
Although many of the bank executives surveyed cited revenue growth as a key objective for their payments modernisation programs, only 13 percent said that their bank’s payments revenue has increased by more than the average market growth rate of 6 percent in the last three years, and only 16 percent expect to grow payments revenues more than the anticipated average growth rate of 5 percent over the next three years.
While payments transformation is part of most banks’ broader digital transformation efforts, two-thirds (65 percent) of bank executives said that the cost of maintaining legacy technology in their payments systems is impeding their ability to invest in new customer solutions.
Accenture conducted an online survey of 120 payment executives in 20 countries between July and August 2020. Surveyed markets include: Australia, Brazil, Canada, China, Denmark, Finland, France, Germany, India, Italy, Japan, Netherlands, Norway, Singapore, Spain, Sweden, Thailand, UAE, the UK, and the US.

Latest News

Key focus on tier 2, tier 3 for V2 Retail’s growth: Director Akash Agarwal

The New Delhi-based fashion retailer is targeting to launch an additional 35 stores in 2024, many of which will...