$271 billion consumer spending to shift from cash to cards, digital payments by 2023 in India: Accenture
The report forecasted that nearly 420 billion transactions worth $7 trillion, globally are expected to shift from cash to cards and digital payments by 2023 – and increase to $48 trillion by 2030.
About 66.6 billion transactions worth $270.7 billion are expected to shift from cash to cards and digital payments by 2023 in India, and further increase to USD 856.6 billion by 2030, a report by Accenture said on Tuesday.
This rapid shift to digital payments due to the COVID-19 pandemic is urgently increasing the need for banks to modernise their payment systems, the report, titled 'Playing the Long Game in Payments Modernisation', said.
The report is based on a survey of 120 payments executives at banks globally regarding the transformation of their payments business, as banks make multi-year investments to compete with non-bank digital-payments providers and comply with new regulations.
ALSO READ: WhatsApp Pay now available to all users in India
Conducted between July and August this year, the report surveyed markets including Australia, Brazil, Canada, China, India, Norway, Singapore, Thailand, the UK and the US. It noted that the expected drop in cash volume is based on GlobalData and Accenture Research assumptions.
Also, the forecast of non-cash transactions in consumer spending is calculated using cash evolution data and MSC rates provided by GlobalData.
"In India, 66.6 billion transactions worth $270.7 billion are expected to shift from cash to cards and digital payments by 2023 – and increase to USD 856.6 billion by 2030," it said.
The rapid move to digital payments has put additional pressure on banks, with three-quarters (75 per cent) of surveyed bank executives saying that the pandemic has increased the urgency of their plans to modernise payment systems, the report added.
ALSO READ: PhonePe is now available at over 20 lakh stores in Maharashtra
"COVID-19 has accelerated the shift to digital payments at a pace banks could not have predicted. The pandemic will permanently change how consumers shop and pay for products as they prioritise convenience above all else," Sulabh Agarwal, who leads Accenture's Payments practice globally, said.
He added that while banks' investments in new payments systems have focused primarily on meeting compliance deadlines, the way they will drive value moving forward is by embracing the changing consumer dynamic and improving the customer experience.
"While India has been ahead of the curve in terms of real-time digital payments infrastructure driven by UPI and 24x7 NEFT, the pandemic has led to a further increase in digital, contactless payments as consumer behavior has undergone a shift," Sonali Kulkarni, Lead – Financial Services, Accenture in India, said.
With newer players launching their payments offerings and increased uptake of 'Buy Now Pay Later' schemes, consumer experience and convenience is bound to improve significantly, she added.
"Banks in India have been making multi-year investments to modernise their payments systems, and going forward, we expect them to strengthen these investments to scale up and improve the resilience of their digital payment operations," she said.
Follow HT Tech for the latest tech news and reviews , also keep up with us on Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.