India’s digital payments market is on track to become a $500bn industry, it has been reported, and the government has launched a Unified Payments Service to capitalise on this.
The UPS project will enable money to be transferred between mobile money services and bank accounts. There are two big players in the space: Whatsapp and PayTM.
Whatsapp has just entered the market this week. “India has been on a huge digital payments boom – WhatsApp couldn’t have asked for a better time to roll this out,” Neha Dharia, an analyst at Ovum, told the Financial Times.
Indians have also been very active at using WhatsApp for transactions, Neil Shah, an analyst at Counterpoint Research, told the FT. “I’ve seen people selling baby clothes, medicines, art and craft supplies — it’s become a Craigslist type of offering.” As of November, there are 160 million Whatsapp users in the country, according to the report – more than any other country.
This digital payments growth comes as a response to the Indian government’s decision to pull high-value banknotes out of circulation in November last year. In an economy still heavily reliant on cash transactions, this move caused large disruption, but has been a catalyst for new payment methods.