According to a survey by GlobalData, a data and analytics company, the use of mobile wallets is expanding at a rapid space and is gradually replacing conventional payments like cash and credit cards.
The company predicted in its analysis that payments made using mobile wallets will increase at a compound annual growth rate (CAGR) of 23.9 per cent between 2023 and 2027 and reach Rs 472.6 trillion ($5.7 trillion) in 2027.
“While cash has traditionally been the most popular method of payment among Indians, its use is gradually on decline. This is mainly due to India’s concerted efforts to promote digital transactions, most prominent being Unified Payments Interface (UPI). Mobile wallets have benefitted the most from this push and have become the preferred choice for payments in India," said Kartik Challa, Senior Analyst Banking and Payments at GlobalData.
According to the survey, UPI has emerged as one of the most popular options for making daily payments.
The National Payments Corporation of India (NPCI) introduced UPI, which facilitates fast transfers between bank accounts using a cell number or QR code and enables clients to combine bank accounts with mobile payment solutions, speeding up transactions.
The rapid acceptance of mobile wallets in India has also been greatly influenced by the strong merchant adoption of QR code payments.
The Reserve Bank of India (RBI) mandated mobile wallet interoperability as of April 1, 2022, allowing customers to make QR code-based payments regardless of the merchant's QR code solution.