Mobile Wallet Payments in India Set to Soar, UPI Driving Growth

A recent report by GlobalData predicts that mobile wallet payments in India will surpass Rs 531.8 trillion by 2028, showing an annual growth rate of 18.3 percent between 2024 and 2028. This substantial growth is attributed to the success of digital payment methods like the unified payments interface (UPI), which is backed by government initiatives.

The report highlights the rapid expansion of mobile wallet payments in India, with the value surging to Rs 202.8 trillion ($2.5 trillion) in 2023, representing a remarkable compound annual growth rate of 72.1 percent between 2019 and 2023. The government’s efforts to promote digital payments, particularly through UPI, have been instrumental in this growth.

The Reserve Bank of India (RBI) recently announced plans to integrate cash deposit services with UPI, a move aimed at enhancing convenience for users. UPI, initially popular for peer-to-peer transactions and bill payments, has now become a preferred mode for merchant transactions and other digital payments.

Since its launch in April 2016, UPI has gained widespread adoption, with over 300 million users as of October 2023, according to GlobalData. To further enhance accessibility, the RBI plans to allow UPI payments from Prepaid Payment Instruments (PPIs) through third-party UPI apps, expanding the scope of digital transactions.

Moreover, the RBI’s proposal to enable cash deposits at Cash Deposit Machines (CDMs) using UPI eliminates the need for ATM or debit cards, simplifying the payment process for users.

The growth of mobile wallet payments is driven by government incentives, the popularity of UPI-based QR code payments, and increased merchant acceptance. UPI offers a secure, fast, and cost-effective solution for fund transfers and payments, potentially revolutionizing the payment landscape in India. This trend underscores the country’s transition towards a cashless economy, promoting financial inclusion and convenience for all.