The Indian real-time payments market is well developed when directly compared with other markets like the US, the UK, Canada and Australia, according to a report published by ACI Worldwide.
The report titled ‘Prime Time For Real Time 2022’ says that India’s real-time payments include the Immediate Payment Service (IMPS) and Unified Payments Interface (UPI), both of which have seen increased usage in the last few years.
“India accounted for the largest number of real-time transactions in 2021 (48.6 billion). This figure was almost threefold that of the closest challenger, China (18 billion transactions in 2021) and almost seven times greater than the combined real-time payments volume of the world’s leading economies – the US, Canada, the UK, France and Germany (7.5 billion),” the report said.
“India is the poster child for real-time payments and a shining example of how a coordinated, collective, nationwide effort can unlock huge economic and social potential. India’s craving for cash may be plummeting, but there is still a great deal more to do. It is time to accelerate our efforts and expand this impact beyond the top-tier metropolitan areas, and replicate our success for the benefit of the entire country,” Ankur Saxena, Head of India and South Asia, ACI Worldwide said in a statement.
So, how did India achieve such great technological feat, and how exactly did it help the Indian economy? Read below to find out.
According to the report, India recorded 48.6 billion real-time instant payment transactions, which is by far the highest number of transactions for any country.
This widespread adoption of real-time payments helped Indian businesses and consumers save approximately $12.6 billion in payment transaction cost, and also unlocked $16.4 billion or 0.56 per cent of the Indian gross domestic product (GDP) output.
“As a platform, the UPI has evolved a lot since it was introduced first in 2016. The consumer faith in instant payments like UPI increased due to several factors, and one of them can be attributed to the increased consumer awareness about the security of the network. Personally, I feel the fast real-time transaction speed and the minimal cost with which it is achieved with UPI, is way superior than any other country I experienced,” said Dewang Neralla, CEO, NTT DATA Payment Services India.
The report further highlighted that the actual transaction volumes for UPI-based real-time instant Indian payments increased 22 per cent than their forecast estimated. At 48.6 billion transactions, UPI and IMPS represented 31.3 per cent of all the transactions in the country, the report said.
“When I look at the global economic scenario, India has always thrived in coming up with better payment systems. In a world where digital real-time payments are given utmost priority, India has also excelled in accounting for the most significant number of worldwide real-time transactions performed in 2021,” says Edul Patel, CEO and co-founder of Mudrex, a Global Algorithm-based Crypto Investment Platform.
The report also listed the factors that led to the wider use of UPI and digital means of transactions.
The report also forecast that the share of all transactions occurring via real time instrument was expected to increase to 70.7 per cent in 2026 from the present 31.3 per cent. The report predicted that in 2026, business and consumer level benefits due to India’s real time instant payment was expected to reach $92.4 billion, adding, that it will have an impact of $54.9 billion or 1.12 per cent in India’s GDP.
