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A comprehensive overview of the cards, payments and consumer banking market in India, with clearsighted commentary backed by relevant data.
Although the Unified Payments Interface (UPI) is the fastest-growing domestic payment platform worldwide, it is about to enter a new era, sharing an expansionist ecosystem with some of the world's biggest tech and payments companies, currently in contention for the right to operate a second – and perhaps even a third – service in conjunction with local players.
Zero MDR and QR interoperability rulings from the central bank are both having a pronounced effect on payments, though cash is still very present and gained renewed appeal for many during 2020 as hoarding became widespread.
India remains ahead of the curve in its region, though market entrants would do well to remain flexible as policy upheavals have become a feature.
How cash has fared through a turbulent half-decade.
What regulatory moves have counted and why.
Which innovations are transforming the POS.
Changes to payments behaviour wrought by Covid.
Why India credit cards may be set for uplift.
TABLE OF CONTENTS
Demographics and the economy
India cards market
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Appendices: Card Market Data
Appendix I: Demographics and the economy
Appendix II: Card payments environment
Appendix III: Cards market
Appendix IV: Mobile payments
Appendix V: Profit pool
Appendix VI: The card networks
Appendix VII: Key retail banks and issuers
Appendix VIII: Acquiring and processing
Appendix IX: Online acquiring
Demographics and Economy
With an average annual population growth rate of 1.13%, India is projected to become the world's most populous country, overtaking China, by 2024. The population is estimated to reach almost 1.4 billion by the end of 2021.
India is home to one of the world's most vibrant and fast-moving payments markets. A massive population, coupled with governmental determination to reduce cash use, has created a fascinating arms race between banks, networks and technology companies.
Payment Cards Market
The use of payment cards has been growing in the country as understanding of the payment structure and consumer confidence in card use increases, more POS and ATM access points appear, and fees are lowered.
The surge in the number of mobile phone and internet users indicates that the digital payments market has huge potential – a potential that is already being tapped.
With the exception of a small number of private sector and foreign banks, credit cards have not traditionally been a big focus for banks in India. This is changing though, as financial inclusion, technology, growth in digital payments and economic uplift are creating a much larger potential customer base.
Visa and Mastercard continue to be the two primary networks in India moving into 2021, with a combined estimated market share of 93 percent of credit cards in issue by the end of 2021. India's domestic cards payment network RuPay's market share in terms of card numbers grew from 27% at the end of 2016 to an estimated 73% in 2021.
Key Retail Banks and Issuers
Great structural shifts in the banking and finance sector caused by the evolving interconnectivity between traditional banks and non-banks are currently underway.
Acquiring and Processing
Traditional POS terminals are quickly becoming obsolete in such a fast-paced market ... As the regulator is so keen on ensuring a high acceptance rate of non-cash options, particularly among smaller merchants in rural areas, the push for alternative POS terminals is gathering momentum.
Much like the acquiring space, it is widely expected that online acquiring will become a hub of collaborations and partnerships as advancements in technology and payment products should prove difficult for the retail banks to keep up with independently.
Regulatory and Markets Information
Most significant was the proposal to establish an independent body, separate from the RBI, called the Payments Regulatory Board, with executive powers to determine standards. The hope is that this new regulator will provide non-banking payment providers with equal opportunities to compete.
Aditya Birla Ideas Payment Bank
Airtel Payments Bank
Atos Worldline India
Bank for International Settlements
Bank of Baroda
Bank of India
Bank of Maharashtra
Bharat Bill Payment System
BHIM Axis Pay
BOB Financial Solutions
Central Board of Direct Taxes
Ezetap Mobile Solutions
Financial Software and Systems
Financial Stability Development Council
Fino Payments Bank
Hitachi Payment Services
ICICI Merchant Services
Immediate Payment Service
India Post Payment Bank
Indian Overseas Bank
Indian Railway Catering and Tourism Corporation
ING Vysya Bank
International Monetary Fund
International Telecommunication Union
Jan Dahn Yojana
Jio Payments Bank
Karur Vysya Bank
Kotak Mahindra Bank
Lakshmi Vilas Bank
Life Insurance Corporation of India
Make in India
Manchester United Football Club
National Common Mobility Card
National Electronic Funds Transfer
National Electronic Toll Collection System
National Payment Corporation of India
New Umbrella Entity
NSDL Payments Bank
Office of the United States Trade Representative
Oriental Bank of Commerce
Payments Regulatory Board
Paytm Payments Bank
Pradhan Mantri Jan Dhan Yojana
Punjab National Bank
Real Time Gross Settlement System
Royal Bank of Scotland
South Indian Bank
State Bank of India
TechProcess Payment Services
The Reserve Bank of India
Unified Payments Interface
Union Bank of India
Reports deliver market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit in the Asia Pacific region. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and Asia Pacific experts.
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