Digital payments in India to grow threefold from 159 bn in FY24 to 481 bn by FY29: Report

New Delhi: India's digital payments industry is witnessing a huge surge, with transaction volumes growing by 42 per cent year-on-year (YoY) in FY 2023-24, according to a new report by PwC.

The report projects that the industry will experience threefold growth, with transaction volumes set to rise from 159 billion in FY 2023-24 to 481 billion by FY 2028-29.

In terms of transaction value, the market is expected to nearly double during this period, expanding from INR 265 trillion to Rs 593 trillion by FY 2028-29.

Unified Payments Interface (UPI) continues to lead India's digital payments revolution. In FY 2023-24, UPI saw an impressive 57 per cent YoY growth in transaction volume, surpassing 131 billion transactions.

The report estimates that by FY 2028-29, UPI transactions could reach 439 billion, making up a staggering 91 per cent of India's retail digital payment transactions.

In FY23 alone, UPI accounted for over 75 per cent of the total transaction volume, reinforcing its pivotal role in the digital payments landscape. This upward trend has persisted into FY24, with UPI transactions reaching Rs 199.9 trillion in value.

Considering the current growth trends, UPI's market penetration, and technological advancements, the PwC report predicts that daily UPI transactions may reach 1 billion during FY 2027-28 and could soar to 1.4 billion by the end of FY 2028-29.

As UPI's growth accelerates, the use of debit cards has seen a decline in both transaction volume and value. Consumers are increasingly shifting their preference towards UPI for convenience and ease of use, affecting the traditional card payment landscape.

Digital payment infrastructure, both online and offline, is rapidly expanding across India, including in Tier 2, 3, and 4 cities. The YoY growth in QR code usage has been significant, with an increase of over 30 per cent in FY 2023-24.

Additionally, the adoption of innovations like soundboxes, merchant cross-selling, and new activation strategies have further fueled the use of digital payments by merchants, especially in smaller cities.