The booming e-commerce market in India is projected to grow at 96 per cent between 2021-2025 to touch $120 billion in transactions value, a report by the global fintech services firm FIS stated. The report found that shift to online payment continues with 13.9 percent growth in global e-commerce, while the 13.4 per cent growth in point-of-sale (POS) transaction value reflects the steady recovery from the impacts of the COVID-19 pandemic.
It added that digital wallets are likely to account for nearly half of the e-commerce transactions value in India by 2023 and overtake cash as the leading Point-Of-Sale (POS) payment method in 2023.
“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 percent of transaction value,” as per the report.
Digital wallets contributed the highest share to e-commerce transactions in 2021 at 45.4 per cent followed by debit cards (14.6 per cent) and credit card/ charge cards (13.3 per cent).The Buy Now Pay Later (BNPL) payment method is growing aggressively globally. In India, this payment method was found to be growing at a Compounded Annual Growth Rate (CAGR) of 53.8 per cent.
BNPL is India’s fastest-growing online payment method. BNPL is projected to rise to 8.6 per cent of e-commerce market value by 2025, up from just 3 per cent in 2021. Prepaid cards, bank transfers and cash on delivery market shares are in decline and are projected to collectively comprise just 8.8 per cent of e-commerce transaction value by 2025, the report stated.The e-commerce industry in India has witnessed strong growth over the last few years and this growth is showing no signs of slowing down,” said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS.
“The COVID-19 pandemic has brought fundamental changes in the way people shop and make their purchase decisions throughout India, and it’s now 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,” Pomford added.
Meanwhile cash was still the king when it came to the in-store payment method in 2021 with a 37.1 per cent share in the transaction value followed by digital wallets ( 24.8 per cent) and credit/ charge cards (18.1 per cent).
India’s POS market is projected to increase by 28.8 per cent between 2021 and 2025 when it will exceed $1.08 trillion.
Source:https://www.businesstoday.in/latest/corporate/story/e-commerce-transactions-to-grow-by-96-to-touch-120-bn-by-2025-fis-report-324517-2022-03-02