India's digital payments market will more than triple to $10 trn by 2026: Report

In a country witnessing rapid growth, it comes as no surprise that India also has one of the fastest-growing fintech landscapes in the world, driven primarily by the advancement in digital payments segment.

A recent report by PhonePe and Boston Consulting Group concluded that India's digital payments market will more than triple from USD 3 trillion to USD 10 trillion by 2026.

In 2015, the Indian Union government launched its Digital India programme, with one of the objectives to achieve a "faceless, paperless and cashless" status for financial transactions at the grass-root level. In line with this, the use of digital payments continues to be promoted so that each citizen of the country can access digital payment facilities that are affordable, convenient and secure. The introduction of innovative reforms and technological advancements are further accelerating growth at an unprecedented pace.

When one thinks digital payments, UPI - India's payment gateway - instantly comes to mind. The Unified Payments Interface (UPI) has been the flag-bearer of India's fintech revolution - launched in 2016 by the National Payments Corporation of India (NPCI).

The UPI is an instant real-time payments system that enables inter-bank peer-to-peer and person-to-merchant transactions through mobile devices instantly.

In a span of just six years, India, primarily a cash-based economy, now leads the world in real-time digital payments, accounting for almost 40 per cent of all such transactions.

The mass adoption of UPI during the COVID-19 pandemic has extended far beyond the urban to even rural India, an effect that left the experts in amazement.