Total digital payments conducted in India will be worth $500 billion by 2020 – 10 times the current value, according to a new report from Google and Boston Consulting Group.

The ‘Digital Payments 2020’ study identifies four key factors that will help push the Indian payments landscape: the ongoing digital and technological revolution, led by the penetration of smartphones and internet on mobile; the entry of several non-banking institutions offering payment services and solutions; increasingly demanding customers who expect instantaneous and one-touch payment solutions; and the several progressive changes in the regulatory framework.

The report also estimates that the share of non-cash contribution for payment transactions will increase from 22 per cent today to 40 per cent by 2020 and 59 per cent by 2025. This, coupled with the expected rise of smartphone users to 520 million by 2020, will result in the number of digital payments soaring.

Alpesh Shah, senior partner and managing director of Boston Consulting Group, noted: “The smartphone explosion will usher in a new era in digital payments in India over the next few years that will see digital payments exceed $500 billion by 2020 and non-cash transactions exceed cash transactions by 2023.”

Rajan Anandan, managing director of Google Southeast Asia and India, added: “Spurred by smartphone penetration, and supported by progressive regulatory policy, the digital payments industry is at an inflection point. It is telling that half of India’s internet users will use digital payments.”

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