Mobile wallets are gradually gaining popularity in India and it is projected that the digital payment mode will cross traditional methods like cash and cards in the coming years. GlobalData, a leading data and analytics company, in its report, said mobile wallets and their usage is expected to grow at a compound annual growth rate (CAGR) of 18.3% between 2024 and 2028 and reach Rs 531.8 lakh crore ($6.4 trillion) in 2028.
As per the report, the value of mobile wallet payments in India grew at a robust CAGR of 72.1% between 2019 and 2023 to reach Rs 202.8 lakh crore ($2.5 trillion) in 2023. This acceptance of mobile wallets is mainly due to the government’s focussed efforts on digital payment methods, like unified payments interface (UPI).
“India is one of the most developed mobile wallet markets in the world. Mobile wallets are now widely used for day-to-day transactions at supermarkets, grocery stores, and street vendors, as well as for online transactions. The rise in mobile wallet adoption is largely driven by UPI, which facilitates payments in real-time simply by scanning QR codes,” said Shivani Gupta, Senior Banking and Payments Analyst at GlobalData.
The Unified Payments Interface (UPI), launched in April 2016, ended FY24 on a strong high, setting new records for both the volume and value of transactions undertaken during March 2024.
Transactions worth Rs 19.78 lakh crore were processed during March 2024, higher than the previous record of Rs 18.41 lakh crore set in January 2024. The value of transactions was 40 per cent higher, compared to that in March 2023, according to data from the National Payments Corporation of India (NPCI).
The FY24 saw the UPI platform handling 13,115 transactions totaling Rs 199.29 lakh crore, a significant increase from FY23’s 8,376 transactions worth Rs 139 lakh crore. Transaction volume rose by 56.6%, while transaction value increased by 43.4% during the year.
The increase in UPI transactions is due to the ease of digital payments, widespread smartphone usage, growing number of people with bank accounts, and the availability of UPI-enabled mobile payment options. Popular mobile wallets like Paytm, PhonePe, Amazon Pay, and Google Pay support UPI for QR code transactions from bank accounts.
To expand globally and establish as a leading payment brand, UPI launched services in Sri Lanka, Mauritius, and the UAE in February 2024. Agreements with countries like Singapore and France are already in progress, with more nations likely to join soon.
“The reach of mobile wallet payments is increasing at a rapid pace, supported by the government’s push towards digital payments, widespread use of UPI-based QR code payments, coupled with high merchant acceptance. The solution offers fast, secure, convenient, and low-cost fund transfers and payments and has the potential to further disrupt the overall payment space in India,” Gupta further said.