New Delhi: A PwC India report reveals that UPI transactions are growing steadily and may reach 1 billion per day by 2026-27, accounting for 90 per cent of the retail digital payments in the country.
During 2022-23, Unified Payments Interface (UPI) makes 75 per cent of the total transaction volume in the retail segment, as per PwC report titled “The Indian Payments Handbook – 2022-27”.
The report projects that in coming five years UPI will make 90 per cent of the total transaction volume in retail digital payments
The Indian digital payments market saw steady growth at a CAGR of 50 per cent (volume-wise) and is expected to reach 411 billion transactions in FY 2026-27 from 103 billion in FY 2022-23, the report said.
“It is estimated that UPI will record 1 billion transactions per day by FY2026–2027, going from 83.71 billion transactions in 2022-23 to 379 billion transactions by 2026-27,” it added.
The report further adds that the credit card segment will continue to grow. It is because card (both debit and credit) is the most used mode of retail digital payments after UPI. The volume of transactions in credit cards is expected to surpass debit cards by FY 2024–2025.
It is expected that credit card issuance will grow at a healthy CAGR of 21 per cent in the next five years and debit card issuance is expected to have a stagnant growth with a CAGR of 3 per cent in the same period, the report said.
“The decline in debit card usage is because the major use case of debit card transactions is cash withdrawal, which can now be replaced by an easier way of withdrawing cash using UPI,” it added.
Mihir Gandhi, Partner and Payments Transformation Leader, PwC India, said that in the next five years, the payments industry is expected to focus on ecosystem expansion and new use cases for existing payment platforms.
“Areas like embedded and ecosystem finance, digital lending based on payment transactions and offline payments will drive the next phase of growth for the payments industry. In the ever-evolving Indian payments landscape, innovation and inclusion are paving the way for a seamless digital economy,” Gandhi said.
The PwC report further said revenue through the credit card business accounts for nearly 76 per cent of the overall cards’ revenue in 2022–2023, making it a lucrative business segment for banks, NBFCs and FinTech.
The revenue for credit card issuance increased by 42 per cent in 2022–2023 compared to 2021–2022 and is likely to grow by a CAGR of 33 per cent for the next five years, it added.
