Digital payments in India continue to surge, with a year-on-year (YoY) transactional volume growth of 42% in FY 2023–24, which is poised to grow by three times in FY 2028–29.

As per the PwC India report titled, “The Indian Payments Handbook – 2024-29” this growth can be attributed to multiple factors including innovations by ecosystem participants, new business models and opportunities, changing technologies and increasing customer awareness.

UPI continues its strong growth trajectory

UPI continues its strong growth trajectory with a YoY growth in transaction volume of 57%. In FY 2023–24, the total transaction volume for UPI was slightly over 131 billion and is expected to grow to 439 billion by FY 2028–29. UPI now accounts for over 80% of the overall retail digital payments in India and is expected to contribute to 91% of overall digital payments industry volumes by 2028-29.

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Credit cards witness a formidable growth

Credit cards have witnessed a formidable growth in FY 2023-24 with the industry adding more than 16 million new credit cards, crossing the well-anticipated milestone of 100 million cards in force. With the addition of new cards, the industry has also seen 22% and 28% surge in transactional volume and value, respectively. Debit cards have seen a dip in both transactions volume and value owing to the shift in preferences by cardholders. Credit cards are expected to reach 200 million by FY 2028-29. Newer feature innovations, product propositions and customer segments are expected to contribute towards this growth.

Discussing the future of digital payments in India, Mihir Gandhi, Partner & Payments Transformation Leader, PwC India, said, “Over the next five years, the payments industry will prioritise expanding ecosystems and exploring new use cases for existing platforms. Key growth drivers will include embedded finance, ecosystem finance, digital lending based on payment data, and offline payments. In India’s dynamic payments landscape, innovation, interoperability, higher security measures and financial inclusion are shaping the path towards a more seamless digital economy.”

Trends that will contribute to growth of the digital payments industry in India – A snapshot

  • Innovations in emerging payment modes and credit availability
  • Intersection of big data analytics for payments solutions
  • Regulations and policies fostering innovations in payments
  • Digitising Indian business payments