According to a recent GlobalData report, card payments in India are expected to reach the Rs. 27.9 trillion (US$ 340 billion) mark in 2023, growing 28.6% year-over-year.
As per GlobalData, a London-based leading data and analytics company, the value of card payments in India saw a strong rise of 26.2% in 2022, propelled by the country’s expanding economy, consumers’ growing inclination towards electronic payments, and initiatives taken by financial regulators to encourage cashless transactions.
The report said that this is probably going to be the case through 2023 and beyond. The transition from cash to card payments has been accelerated by loyalty and reward programmes, especially during the Covid-19 outbreak. Credit and charge card payments led to a robust rebound in card payments that saw impressive growth rates of 53.0% in 2021 and 46.7% in 2022.
Increased consumer expenditure on things like travel, lodging, dining, and transportation is the cause of this surge. Credit and charge card growth is also fuelled by the attraction of loyalty programmes and benefits, which include easy instalment plans and discounts. With a forecasted growth rate of 38.1%, forecasts for 2023 also indicate that credit and charge card payments would continue to rise.
On the other hand, a more moderate growth rate of 9.5% is projected for debit card payments during the same time period. Further driving this growth in card-based payments are initiatives by the government to improve the infrastructure for electronic payments.
To aid in the development of payment infrastructure, the Reserve Bank of India (RBI) established the Payments Infrastructure Development Fund (PIDF) in January 2021. This fund receives contributions from banks, card networks, and the RBI. The fund intends to give retailers financial assistance for installing QR codes and point-of-sale (POS) terminals.
Merchants are now eligible for subsidies ranging from 60% to 75% for the cost of installing point-of-sale terminals and from 75% to 90% for QR codes, as a result of the RBI’s decision from June 2022. Thanks to PIDF funding, the nation has effectively installed over 480,000 point-of-sale terminals and 18.3 million QR code acceptance sites by December 2022.
