orldline Report Highlights the Evolution of Payment Landscape in India
A recent report by French payment firm Worldline has shed light on the evolving landscape of digital transactions in India, revealing a significant surge in online dealings during the second half of 2023. The report underscores the dominance of sectors such as ecommerce, gaming, utilities, government, and financial services, which collectively accounted for nearly 80% of total online transactions. Additionally, the rise of mobile payments, particularly through Unified Payments Interface (UPI), and the proliferation of point-of-sale (PoS) terminals signify a paradigm shift in the country’s payment ecosystem.
Ecommerce, gaming, utilities, government, and financial services emerged as the frontrunners in online transactions, comprising approximately 80% of the total volume during the latter half of 2023, according to Worldline’s India Digital Payments Report H2 2023. Meanwhile, in-store transactions were dominated by merchant categories such as grocery stores, restaurants, service stations, clothing stores, pharmacies, and hospitals, which collectively accounted for around 65% of transaction volume and nearly 50% of total value in the same period.
The report highlights the continued dominance of UPI as the preferred payment mode in India. UPI transactions witnessed a remarkable 56% year-on-year growth between July and December 2023, with the volume surging to 65.7 billion and the value reaching Rs 99.68 lakh crore. The exponential growth in UPI transactions underscores the increasing adoption of mobile payments among Indian consumers.
Moreover, the report indicates a significant expansion in payment acceptance channels across the country. The number of PoS terminals increased by 26% during the latter half of 2023, reaching 8.5 million. Private sector banks dominated this space with a 73% market share, emphasizing the growing role of fintech in facilitating diverse payment channels.
Ramesh Narasimhan, CEO of Worldline India, emphasized the importance of adapting to a diverse array of payment channels amidst the proliferation of PoS terminals and the ascendancy of mobile payments.
Despite the surge in UPI transactions, the report noted a decline in the average ticket size (ATS) of these transactions by 8% to Rs 1,515. However, peer-to-peer (P2P) transactions witnessed a 4% increase in ATS to Rs 2,745, while merchant transactions experienced a 9% decline to Rs 656.
Major players in the UPI market, including PhonePe, Google Pay, and Paytm, continued to dominate, collectively accounting for 95.4% of all transactions by volume in December 2023.
In contrast, the report observed modest growth in the total number of cards in circulation, with credit cards witnessing the highest surge at 21% year-on-year growth. Additionally, in the electronic toll collection space, the number of tags issued increased by 45% from July 2022 to December 2023, indicating a gradual transition towards digital payment methods.
