Digital wallets to account for 52.9% of all e-commerce payments by 2025: Study
As shopping patterns of Indian consumers continue to evolve due to the pandemic, mobile wallets and digital payment apps have been surpassing credit card usage and are on course to replace the traditional payment methods. This could be further reinforced by the latest report released by FIS claiming that digital wallets are projected to extend their lead over other e-commerce payment methods through 2025, when they are projected to account for 52.9% of transaction value.
The report claims that digital wallets were leading e-commerce payment methods in 2021 with 45.4% usage followed by debit cards (14.6%) and credit/charge cards (13.3%). Buy Now, Pay Later (BNPL) is becoming India’s fastest-growing online payment method. BNPL is projected to rise to 8.6% of e-commerce market value by 2025, up from just 3% in 2021, as per the FIS.
Phil Pomford, General Manager at FIS, believes that Covid-19 pandemic has brought the fundamental change in people’s behavior of shopping and purchases and now it’s vital for merchants to provide customers with a hassle-free and convenient shopping experience. “Those who offer a compelling value proposition to consumers are well positioned to thrive as India’s e-commerce market continues its dramatic growth.”
Paytm, Freecharge, Mobikwik, Oxigen, mRuppee, Google Pay, Airtel Money, Jio Money, SBI Buddy, itz Cash, Citrus Pay, Vodafone M-Pesa, Axis Bank Lime, ICICI Pockets, SpeedPay, are some of the key digital wallets being used for real time payments. FIS is of the views that digital wallets are projected to overtake cash as the most popular in-store payment method by 2023 when they are projected to account for 30.8% of point-of-sale (POS) transaction value.
The 2022 Global Payments Report by Worldpay from FIS examines current and future payments trends across 41 countries in five regions. Regarding 2021, the report found the shift to online continue with 13.9% growth in global e-commerce, while the 13.4% growth in POS transaction value reflects the steady recovery from the impacts of the pandemic.
FIS report also foresees that prepaid cards, bank transfers and cash on delivery market shares are in decline and are projected to collectively comprise just 8.8% of e-commerce transaction value by 2025. India’s POS market is projected to increase by 28.8% between 2021 and 2025 when it will exceed $1.08 trillion, as per FIS.
Amidst the digital wallet boom, FIS anticipates India’s e-commerce market to increase 96% between 2021 and 2015 to $120 billion.