The Western world continues to be dominated by debit-and-credit-card payments, while in the east, in India, China, digital financial transactions are soaring. In one chart, here's how India tops the charts in digital payments.
The image above tells a whole story about how India has leapfrogged in the global race towards digital financial payments. As the image shows, while most major countries including the United States still have most people using debit and credit cards for financial transactions, India has moved in a major way to digital financial transactions.
While a VISA card is the most popular form of payment in the US, Sweden, Spain, Italy, Canada, Korea, Brazil, and Australia, online payment methods like United Payments Interface(UPI), a fast real-time digital payment method, RuPay - Rupees and Payment and Paytm, are companies that offer financial and payment services and Google Pay, a mobile payment service which is developed by Google,are the most popular in India.
World Leader In Digital Payments
India is the market leader for digital payments when compared to other nations. Amid Covid, In 2021, India had more real-time online transactions than nations like China and the US combined. The nation handled 48 billion real-time payments transactions, followed by China with 15.7 billion, South Korea with 6 billion, and Thailand with 5.2 billion.
China has a large number of online payment apps and a great amount of online transactions. Thailand, South Korea, and the UK are among the nations that accept payments online. Nigeria is another nation that has attempted to introduce electronic payment systems on its soil. Despite having relatively modern technology, a substantial portion of transactions in Japan are still made in cash, although after the epidemic, there was a noticeable increase in digital transactions.
The Internet and similar technologies are playing a significant role in assisting efforts to promote development. The concept of digital development is a powerful Idea. The Internet has significantly altered the lives of modern generations in ways that no other technology revolution has. India is emerging as a global leader in digital payment systems. India has undergone significant change over the past few years, including significant digitisation.
Many more people are now able to quickly access digital payments as a result of the significantly larger reach that digital products have as compared to traditional cash methods. To transact and access digital financial products, consumers only need a smartphone with strong mobile connectivity. Now, sending and receiving money is as simple as dialing a number or swiping through applications on the phone.
Unprecedented Growth
With an estimated 750 million smartphone users, India has made significant progress in its quick digital transition, creating a favorable environment for a variety of digital businesses. UPI transactions have grown rapidly since the launch of UPI in April 2016, achieving a major global milestone of annual transaction value exceeding $1 trillion in the financial year 2021-22 (with 45.6 billion transactions) and the domestic milestone of monthly transaction value exceeding 10 trillion rupees in May 2022 (with 5.95 billion transactions). This growth in UPI transactions, at a CAGR of 381% over the last five years, has propelled the adoption of digital payments in India.
The Indian government budgeted around $9.6 billion for technology and digitisation spend - this rose to $10.7 billion in the 2022 budget. The government is also implementing a number of initiatives to promote card and digital payments. The suggested policy reforms aim to replace the usage of cash either in government transactions or in regular commerce by providing the appropriate incentives to utilize digital financial transactions via policy intervention.
Amid Covid-19 and the need for contactless payments at that time, as well as advancements in technology and product offers, have all contributed to the exponential rise and use of digital payments. As per the Government, promoting digital payments has long been a stated goal of government policy.
Most real-time payments are made in India. India appears to have been successful in creating payment systems that are accessible to the common person. There are many trustworthy apps for digital payments in India. Digital payments were first introduced in India by businesses like Paytm and Google Pay. The ordinary citizen may now use digital payments.
UPI: A Breakthrough Technology
National Payments Corporation of India developed the immediate real-time payment system known as the Unified Payments Interface (UPI). On a mobile platform, it can rapidly transfer money between two bank accounts. The Unified Payment Interface is a technological advance that might spark a revolution in digital payments and, ideally, serve as a first step toward interoperable digital payments. From large and flourishing businesses to small street vendors, UPI is helping everyone with their payments and transactions. A company that provides financial services and digital payments, Paytm has made QR-based payment methods possible. The ability to digitally pay anyone is made possible because of Paytm, UPI and Google pay.
Fintech (financial technology) and Big Tech are important forces driving UPI adoption. The leading UPI space was occupied by PhonePe (46 per cent), Google Pay (34 per cent), Paytm (14 per cent), and banks and others (6 per cent).
A government project called, Digital India, is also enabling its goal of bringing financial inclusion to the most underprivileged segments of society. It intends to digitally empower the country in the field of technology. The Digital India Mission is a project that includes ideas for connecting the country's rural regions to high-speed internet networks. The Digital India program is made up of three main parts. They are building digital infrastructure, providing services online, and having a knowledge of the internet.
There are nine pillars of digital India, which are as follows -
1. Broadband highways
2. Universal Mobile Access
3. Public Internet Access Programme
4. e-Governance: Reforming Government through Technology-
5. Electronic Delivery of Services
6. Information for all
7. Electronics Manufacturing
8. Early Harvest Programmes
9. IT for Jobs
Over the past few years, India's digital payment system has seen a significant transformation. Digital technology has been enthusiastically adopted by Indian customers. Today, all Indian enterprises and regular citizens use digital payment systems.
Expect many more such graphs and charts as the one above in the future.