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BCG also projects that the transaction volumes will outpace total transaction values to grow by 25% by 2028 to reach 434 billion. It was at 144 billion at the end of 2023.
“We will see that the growth in payments volume will outpace value growth because margins from interchange will continue to shrink,” said Yashraj Erande, India Leader, Financial Institutions Practice, BCG. “We will continue to see cost optimisation due to greater automation.”
Revenues of the Indian payments industry are expected to grow at a tepid pace of 11% to reach $70 billion by 2028. It was at $41 billion at the end of 2023.
In terms of categories, credit cards and fund transfers are the biggest segments expected to see a jump. The value of transfers is expected to form the biggest chunk at $47 trillion at the end of 2028, the consulting firm has projected. It was at $29 trillion at the end of 2023. The number of transactions in the fund transfer category is seen surpassing 423 billion from 134 billion for the period stated above.
Credit card transaction value is expected to rise to $563 billion from the $210 billion levels seen in 2023. Number of transactions on credit cards is projected at 6 billion from 3.3 billion. Payments through debit cards is expected to shrink to $57 billion at the end of 2028 from $75 billion seen in 2023. The number of transactions is estimated to be 12.7 billion at the end of 2028 from more than 25 billion seen at the end of 2023.Two other segments that are seen shrinking are cheque-based payments and prepaid cards. While the value of cheque transactions could fall to $764 billion from $867 billion for the periods mentioned above, the volumes could also fall to 310 million in 2028 from 671 million in 2023.Likewise, prepaid cards could see transaction values fall to less than $3.5 billion in 2028 from $5.7 billion levels.