The mobile payment transaction volume in India is likely to witness exponential compounded annual growth rate (CAGR) of over 90 per cent to reach 153 billion by FY 2022 as against a meagre about 3 billion in FY 2016, noted a recent ASSOCHAM-RNCOS joint study.
"Mobile payment transaction value in India is also likely to register over 150 per cent CAGR and cross Rs 2,000 trillion by FY 2022 from just over Rs 8 trillion as of FY 2016," noted the study titled 'Indian M-wallet market,' jointly conducted by ASSOCHAM and research firm RNCOS.
"The digital payment sector might register unprecedented growth thereby replacing traditional cards and cash as the primary payment method over the next several years but what is required is to make such systems more foolproof," said Mr D.S. Rawat, secretary general of ASSOCHAM.
"Flagship government initiatives such as Digital India together with union government's announcement about demonetising Rs 500 and Rs 1000 denomination notes will act as key catalysts and enablers of this transformation more so with ever-increasing internet and mobile penetration as adoption of digital payments is all set to witness a massive surge in the coming years," said Mr Rawat.
"With over one billion mobile subscribers, India has a promising potential for internet on mobile, and the same is expected for payments and business transactions on mobile," he added.
Mobile banking segment contributed largest share of 49 per cent in Indian mobile payment market with over 386 million transactions worth Rs 4,000 billion in FY16, with majority being money transfers, the study noted.
Besides, share of mobile banking in M-payment market has increased tremendously from eight per cent in FY14 to 49 per cent in FY16.
However, mPOS (mobile point of sale) has the largest market share of 66 per cent in volume terms in FY16 which has fallen down from the level of 85 per cent in FY14 owing to significant number of people shifting to mobile banking for convenience and to avoid carrying various cards.
The study also highlighted that mPOS segement's share in mobile payment is likely to fall further and by FY22, share of mobile banking is likely to rise to 14 per cent in terms of volume.