The rise of e-commerce increased internet penetration, and government initiatives like Digital India have completely transformed the payment processing scenario in the country. Moreover, these are the key factors responsible for the growth of payment gateways in India.
Due to the ease of processing payments and security they provide, payment gateways have become an integral part of businesses – small and large alike. In this post, you’ll learn about the most important Indian payment gateway statistics for the year 2021. So, keep reading!
Payment gateway market statistics to provide you with deep insight.
Indian Payment Gateway Industry To Touch A CAGR of 15% By The End Of 2025
No matter how surprising it may look, the Indian Payment Gateway market is expected to grow with a whooping Compound Annual Growth Rate of 15%. Today, payment gateway integration is one of the integral parts of the businesses, regardless of the industry and market they’re operating in.
It allows the merchants to collect payments in a hassle-free and cost-effective way while giving their customers the flexibility to choose their preferred payment method to make transactions in a secure and protected environment.
With an overwhelming acceptance of digital payments and the increased smartphone proliferation, customers are choosing online payment modes over anything.
Merchants, on the other hand, are using payment gateways because they allow them to provide multiple payment options to their customers, higher transaction rates, and are very easy to integrate as well. Another benefit of payment gateways for merchants is, they allow them to access their money instantly through instant settlement.
According to Statista, the total number of internet users in the country is noted to be 540 million. Not just that, as per the finding of RBI, the mobile payment volume has increased by a whopping $10 billion, all thanks to the smartphone and internet penetration in the country.
It is pretty much clear that the Indian payment gateway market has got a great push from the increasing online payment trends in the country. Further, government initiatives and policies are supporting this change and utilising it to make India a cashless economy.
Demonetization on the other hand was perhaps the biggest currency culling exercise rolled out by the government of India in 2016. It made around 86% of the currency invalid, which gave a shock to the nation.
The major aim behind demonetization was to take action against terror financing, black money, and counterfeit currency. It can be said that it is a major factor that led to the adoption of payment gateways.
Demonetization is a major reason behind the rise of digital payments in India.
UPI Recorded 2.3 Million Digital Payments Transactions
According to NPCI (National Payments Corporation of India), UPI has seen a boost due to the Covid-19 outbreak. The country recorded nearly 2.3 million transactions by UPI alone. Note that these digital transactions were worth more than four trillion Indian Rupees.
Further, out of these 2.3 billion transactions, more than 70% of the transactions were done on the payment gateway. For those who don’t know, Unified Payments Interface, UPI is a system coined and directed by NPCI. Launched in 2016, it has become the most popular payment method among customers.
Surprisingly, it has even outperformed the credit/debit card and net banking methods. Note that the growth of UPI is directly linked with the growth of payment gateways.
The payment gateways allow customers to pay via UPI. Similar, they allow merchants to make payouts almost instantly by using UPI as their payment method.
Value of Payment Gateway Market To Reach 1.7 Billion USD By 2025
This statistic says that the value of the payment gateways industry in India is forecasted to touch 1.7 billion US dollars by the end of 2025. This is astonishing because this value was just 400 million in 2017.
The Covid-19 episode has been a little bit favourable for the payment gateway market. It is the main reason behind the rise of payment gateway in India.
There is no hidden fact that many businesses hit the rock bottom during the lockdown. However, the pandemic pushed the country towards a cashless economy. In other words, digital payments options have become more popular than ever.
53 Billion Digital Transactions Were Recorded Alone in 2021
When coronavirus finally came under control in 2021, around 53 billion online transactions were recorded all across the country.
This was a massive increase as compared to the transactions recorded in the past three years. Further, these digital transactions have come from the mainstream payment methods including NEFT, UPI, Credit /Debit cards, etc.
A significant part of these transactions has been completed through payment gateways. They allow merchants to offer the flexibility to choose desired payment options for their customers.
E-commerce Market Expected To Reach 200 Billion USD By 2026
The growth of payment gateways in India is directly proportional to the growth of the e-commerce industry in the country.
According to the market reports, the e-commerce industry in India has seen a higher growth trajectory and is expected to outperform the United States to become the 2nd largest e-commerce market in the world by 2034. By the end of 2020, it was recorded at 64 billion USD and is expected to touch a mark of 200 Billion by 2026.
Adding to it, various government policies and regulations are also supporting the growth of the e-commerce industry in the country. In our country, 100% FDI is allowed in B2b eCommerce. According to the latest guidelines, 100% FDI under the automatic route is allowed by the e-commerce market model.
As customers and merchants are avoiding gathering in the local shops due to the coronavirus pandemic, shop owners are utilising the route of “home-delivery” and providing a virtual shopping experience by accepting payments remotely through payment gateways.
Besides, they can not only collect multi-channel payments, but also set up auto-debit options via e-mandate, propose new offers and deals, make pass payouts, and so on.
So, these are the most important statistics about the digital payment scenario and payment gateway in India. As you can see, the Indian payment gateway industry is growing at a great pace due to the growth of e-commerce and movement towards a cashless economy.
More and more businesses today are using payment gateways to provide a smooth shopping experience to their customers. Not just the customers, this adoption is helping the merchants as well. They can process their payments in less time and cost.