It is not without reason that Bengaluru is called India’s tech capital – it emerged as the city that ranked highest on adoption of digitized payment. This was revealed in Razorpay’s fourth edition of ‘The Era of Rising Fintech’ report.
23.31% of the city’s residents used the platform in the last calendar, followed by those in New Delhi at 10.44%. In 2018 too, denizens from Bengaluru did the maximum transactions on Razorpay at 29.26%, followed by Hyderabad at 9.02%.
Studying transactions on its financial services platform from January 2018 to December 2019, the company compiled a detailed study about India’s evolving fintech environment. This included an analysis of emerging trends in digital transactions, their impact in creating a digitally inclusive economy and transparency by boosting digital payments.
A key observation in this study was the surprising decline in the use of plastic cards, which reduced from 56% in 2018 to 46% in the last year, as well as in net banking, which declined from 23% in 2018 to 11% in the last year.
UPI, on the other hand, saw an uptake, almost doubling from 17% in 2018 to 38%. Google Pay took the lion’s share at 59% followed by PhonePe at 26% and Paytm at 7%. In the earlier year too, Google Pay commanded 48% of the UPI app market share, though BHIM grabbed a substantial 27% followed by PhonePe at 15%.
Sharing his viewpoint for this shift in trends, Ashwini Sharma, a financial consultant said, “Given the rising number of online frauds and scams, people feel more secure using Google Pay UPI, especially for peer-to-merchant (P2M) transactions, which can be verified instantly. In the case of card payments, if there is a dispute, the arbitration process is very long-winding and for SMEs, this can lead to cash flow blockage.”
Coming to digital wallets, Amazon Pay emerged as the preferred choice at 33%, while its distant contender was Ola Money at 17%. These data underlined the fact the Indian consumers are increasingly keen to opt for digital payments during financial transactions.
“A growth of 338% in digital payments in 2018-19 is massive. It’s the highest we’ve seen so far in India. Among other factors that led to this exponential growth, it was UPI, which rose in prominence, dominating other modes of transactions,” said Harshil Mathur, CEO and Co-founder, Razorpay. “For the first time in the history of digital payments, we saw UPI overtaking cards. UPI has become the preferred choice not only for peer-to-peer payments but also for P2M payments.”
India’s digital payments market has registered a 128% CAGR growth in the past five years as more companies join the fray and more customers opt for this channel. The presence of more players, and the expansion of the user base is expected to ensure a sustained business model for everyone in the ecosystem.