Demonetisation and cashless drive has pushed the growth trajectory of digital payments in India significantly, and by 2025, digital transactions in the country could be worth USD 1 trillion annually, says a report.
According to a white paper by ACI Worldwide along with AGS Transact Technologies (AGSTTL), digital transactions in India could be worth USD 1 trillion annually by 2025, with four out of every five transactions being made digitally.
The user base for digital transactions in India is currently close to 90 million, but could triple to 300 million by 2020 as new users from rural and semi-urban areas enter the market, the report said.
Flexible, scalable and reliable technology will be critical to the future of payments in India as the market continues to experience incredible growth, said Manish Patel, Vice President, ACI Worldwide.
Meanwhile, with the rise in digital payments, cyber security costs for companies in India is also rising.
Mahesh Patel, Group Chief Technology Officer, AGS Transact Technologies said, we understand that rapid rise in internet users nationwide is spurring an increase in digital transactions. However, the Indian market unlike many western nations is still to mature and remains threatened due to lower awareness levels”.
As per the report, Cyber attacks cost India an estimated USD 4 billion annually, and could rise to USD 20 billion by 2025, with the digitisation of payments presenting new challenges for cybersecurity.
“It is necessary that the rise in digital transactions remain holistic thereby supporting growth with scalable processing platform. Also, it should be accompanied by allied precautionary measures such as cyber security and fraud prevention, Patel said.
Mass adoption of e-payments and a thriving fintech scene, combined with regulatory policy, are set to propel India into a leading position in the global payments landscape, it said adding unified payments interface (UPI) transactions are a key driver of greater financial inclusion.
The white paper titled “Transactions 2025” noted that India’s smartphone user base is likely to double to 500 million by 2020 as affordable devices and data will spur safe, fraud-resistant digital transactions based on biometrics and multi-factor authorisation.
ACI Worldwide is a global provider of real-time electronic payment and banking solutions, while AGS Transact Technologies (AGSTTL), is an end-to-end payment solutions company.