US$ 271 Billion Consumer Spending to Shift from Cash to Cards, Digital Payments by 2023 in India

Approximately US$ 270.7 billion in transactions worth US$ 66.6 billion are projected to move from cash to cards and digital payments in India by 2023 and expand further to US$ 856.6 billion by 2030, Accenture said on Tuesday. The study entitled ‘Playing the Long Game in Payments Modernisation’, said that this rapid move to digital payments due to the COVID-19 pandemic is increasingly expanding the need for banks to modernise their payment systems.

The report is based on a survey of 120 payment professionals at banks worldwide about the transformation of their payments sector, as banks make multi-year investments in order to compete and comply with new regulations with non-bank digital payments providers.

The study surveyed markets including Australia, Brazil, Canada, China, India, Norway, Singapore, Thailand, the United Kingdom, and the United States, conducted between July and August this year.

The projection of non-cash transactions in consumer expenditure is estimated using GlobalData’s cash evolution data and MSC rates.

The rapid switch to digital payments has placed additional pressure on banks, with three-quarters (75%) of bank executives surveyed saying that their efforts to modernise payment systems have increased by urgency of the pandemic, the report added.

Mr. Sulabh Agarwal, who leads Accenture’s Payments practice globally, said, “The transition to digital payments at a speed banks could not have expected has accelerated COVID-19. As they value convenience over all else the pandemic will permanently alter how customers shop and pay for goods.”

He added that while banks’ investments in new payment systems have focused largely on meeting enforcement deadlines, embracing the changing market environment, and enhancing the customer experience is the way they can drive value going forward.

Ms. Sonali Kulkarni, Lead – Financial Services, Accenture in India, said, “Although India has been ahead of the curve in terms of UPI and 24×7 NEFT-driven real-time digital payments infrastructure, as customer behaviour changed, the pandemic has led to a further growth in digital, contactless payments.”

She added, with newer players introducing their payment deals and growing acceptance of ‘Buy Now Pay Later’ programmes, she said, customer service and convenience are bound to dramatically improve.

She said, “In order to modernise their payment systems, banks in India have made multi-year investments and we expect them to strengthen these investments in the future to scale up and boost the efficiency of their digital payment operations.”

Source: IBEF