Ken Research study predicts mobile commerce will grow at a scorching 32 per cent till 2020
Digital payments, are forecast to overtake cash transactions in India by 2023 even though the second largest consumer market globally, still remains ( demonetization notwithstanding!) a largely cash-driven economy.
Market analysts Ken Research, in a just-published report, suggest there is a big business opportunity in the digitization of payments -- provided they can be made as easy to use, convenient, and secure as cash.
But there are other prior requirements: increase in smartphone penetration, increasing access to the internet, and the development of a robust digital payments infrastructure.
As the move to non-cash payments accelerates, cards will be used more frequently by Indian consumers, says Ken Research. Providers should increasingly promote card adoption and use through merchant partnerships, reward programs, and benefits on day-to-day spending as well as educating consumers about the advantages of using payment cards over cash.
While m-commerce or mobile e-commerce is expected to record a compound annual growth rate (CAGR) of 32% between 2015 and 2020, e-commerce generally is set to record a growth of 27% and will continue to account for the majority of online purchases by value and is expected to $42.4 billion through 2020.
In spite of recent progress, India's infrastructure network is still underdeveloped, with only 1 Point Of Sale (POS) terminal per 1,007 people and 1 ATM per 6,471 people.
This situation is unlikely to improve: Government has hinted it will go slow on expanding the existing ATM network of some 2 lakh terminals to nudge people to an e-cash era. So any lurch towards a predominantly digital payments world will depend on Internet -based and mobile phone-fueled money transfer apps. Today millions of Indians are using such solutions, driven by obstacles to accessing their own money any other way. But once the cash crunch eases, will they continue using the e-money tools or will they slide back to carrying cash? That's the challenge!