The growth of India’s digital payments sector in recent years has been phenomenal, and shows few signs of slowing: By 2023, digital payments will total US$1 trillion, a five-fold rise in five years.¹
In part, this growth is due to government efforts to drive financial inclusion and promote a cashless society, as well as regulatory moves to encourage digital uptake.
But the news is not all good: Margins are potentially negative for most mobile-wallet providers. At the same time, firms must contend with stringent regulatory requirements and the entrance of newcomers, particularly Facebook’s WhatsApp Pay.
The ongoing upheaval and the vast opportunities on offer would likely require incumbent banks and digital payments providers to take a range of strategic steps if they are to secure their place in this evolving landscape.
Briefly, these include monetizing data, offering personal finance solutions, providing loans and trade finance for small businesses, and moving into the B2B payments space.
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1 Digital payments to grow to $1 trillion by 2023: Credit Suisse, Financial Express (2/7/2018)