Data analysis firm GlobalData reports a significant surge in India’s mobile wallet market, with the unified payments interface (UPI). Their report highlights a robust 72.1 per cent compound annual growth rate (CAGR) in the value of mobile wallet payments between 2019 and 2023, reaching Rs 202.8 trillion (USD 2.5 trillion) by 2023.
This growth is attributed to the Indian government’s initiatives promoting digital payment methods, with UPI being the most prominent example.
“India is now one of the most developed mobile wallet markets globally,” said Shivani Gupta, Senior Banking and Payments Analyst, GlobalData. “Mobile wallets are commonplace for everyday transactions, from supermarkets and street vendors to online purchases. The rise of UPI, facilitating real-time payments through QR code scanning, is a major driver of this adoption.”
Additionally, introduced in April 2016, UPI boasts a user base of 300 million as of October 2023, with a continuous rise due to increasing merchant acceptance. National Payments Corporation of India (NPCI) statistics showcase a substantial increase in UPI transactions. February 2024 saw 12.1 billion transactions worth Rs 18.3 trillion (USD 221.5 billion), compared to 7.5 billion transactions valued at Rs 12.4 trillion (USD 150.1 billion) in February 2023.
Several factors contribute to the surge in UPI payments, the convenience of electronic transactions, widespread smartphone penetration, a growing banked population, and the proliferation of UPI-enabled mobile payment solutions. Popular mobile wallets like Paytm, PhonePe, Amazon Pay and Google Pay have integrated UPI functionality, allowing users to conduct QR code transactions directly from their linked bank accounts.
Furthermore, UPI is expanding its reach beyond India’s borders. February 2024 saw UPI integration in Sri Lanka, Mauritius and the UAE, with similar agreements in place for Singapore and France. This international expansion positions UPI as a potential global payment brand.
“The reach of mobile wallet payments is rapidly increasing,” Gupta concluded. “This is supported by the government’s push for digital payments, the widespread use of UPI-based QR code payments and high merchant acceptance. UPI offers a fast, secure, convenient and cost-effective way to transfer funds and make payments, potentially disrupting the overall payments landscape in India.”
GlobalData forecasts continued growth in the Indian mobile wallet market, projecting a CAGR of 18.3 per cent between 2024 and 2028, reaching Rs 531.8 trillion (USD 6.4 trillion) by 2028. This suggests that mobile wallets are likely to become the primary payment method in India, surpassing traditional cash and card transactions.
