By 2023, digital wallets are expected to overtake cash: report

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For customers around the world, e-commerce payment preferences continue to shift from cash and credit cards to digital wallets and Buy Now, Pay Later (BNPL), according to the FIS press release.

“The Indian e-commerce market is expected to grow by 96% to $120 billion between 2021 and 2015,” according to FIS Worldpay’s Global Payments Report (GPR) 2022. The GPR examines current and future payment trends, as well as future projections. for payment method shares as well as market size, the press release said.

According to the company, there has been a significant increase in the adoption of cashless payments with advancements in technology and digitalization in India. The market shares of prepaid cards, bank transfers and cash on delivery are in decline and are collectively expected to represent only 8.8% of the value of e-commerce transactions by 2025, according to the report. Digital wallets (45.4%), followed by debit cards (14.6%) and credit/charge cards (13.3%) were the top e-commerce payment methods in 2021. The report also adds that with superior payment solutions, flexibility of underlying payment methods, anchoring role in e-commerce market ecosystems and local wallets consolidating into super regional and global applications, digital wallets are expected to grow worldwide. In India, they are expected to extend their lead over other e-commerce payment methods until 2025, when they are expected to account for 52.9% of transaction value.

India’s Point of Sale (POS) market is expected to grow by 28.8% between 2021 and 2025, when it will surpass US$1.08 trillion. Cash was the top in-store payment method in 2021 with 37.1% of transaction value, followed by digital wallets (24.8%) and credit/payment cards (18.1%). However, digital wallets are expected to overtake cash as the most popular in-store payment method by 2023, when they are expected to account for 30.8% of POS transaction value, according to the report.

Furthermore, the report states that BNPL is the fastest growing online payment method in India. BNPL services, which allow consumers to pay for goods and services either through a single bill or a finite set of installments, are expected to reach 8.6% of e-commerce market value by 2025, compared to only 3% in 2021.

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