As per RBI, total payments processed through digital wallets in India touched US$4bn in 2015. In contrast, total payments processed by PayPal (#1 digital payment player in the US) in 2015 was US$154bn in the US, which was 1.3% of total US consumer expenditure. On the other hand, Alipay of China processed about US$850bn of payments in 2015 (as per iResearch), which accounted for 20.7% of Chinese consumer expenditure. If we were to apply these two ranges to understand the potential of digital payment market in India, it could amount to US$23bn (at 1.3%) to US$364bn (at 20.7%) by 2020.
In India, the share of card transactions was even lower at 0.7% in 2015, which possibly opens up significant opportunities for digital payments. While regulations will also shape the contours of this segment, it will be an interesting area to watch.
