Abstract
NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP
India boasts one of the fastest growing economies in the world. The Indian
banking and payments sector have undergone reforms and are rapidly changing.
The Reserve Bank of India (RBI) has made modernizing the improving efficiency
in the country' s payment system a top priority. As such, India' s central bank
has set up essential payments infrastructure and implemented regulatory
policies that promote the migration to electronic-payments systems. Private
and foreign banks are also playing an increasingly important role in India' s
banking sector, which has been historically dominated by state-owned,
traditionally paper-based banks. As competition intensifies in India' s banking
and payments industry, there will certainly be enormous opportunity for growth
and intensive product innovation, as financial industries compete for new and
richer consumer segments.
Although India remains a predominantly cash and paper based society for
financial transactions, the number of payment cards in circulation, both
credit and debit, has been increasing sizably in the last five years. Evidence
of the growth in payment cards is also reflected in an increase in number of
automated teller machine (ATM) and point-of-sale (POS) terminals across the
country. India' s telecommunications sector has also registered exponential
growth in mobile subscribers in the last few years. As such, many financial
institutions and mobile service providers are partnering to offer more robust
and available mobile payments solutions. Payment products leveraging mobile
technology have the potential to allow large numbers of consumers to gain
access to the formal banking system, particularly Indian consumers in rural
areas, who have not been able to date.
The report contains 28 pages and 10 exhibits
"Although cash continues to be a dominant mode of payment in India, more
Indian consumers are changing their spending habits to include more electronic
payment product options. Indian consumers tend to use their credit cards for
purchases and their debit cards more for cash withdrawals at ATMs," notes
Elisa Athonvarangkul, Analyst Mercator International Advisory Service.
"India' s populations is young, upwardly mobile, and its middle class is
undoubtedly on the rise. As Indian consumers become more familiar with payment
cards and the benefits they offer, they will choose to leave paper currency
and check books behind and will prefer not to leave home without their
credit/debit cards."
The most recent report from Mercator' s International Advisory Service provides
an overview of India' s payments market. The report also presents a review of
India' s banking industry and payments sector, an analysis of recent trends in
the country' s payment card market, as well as a discussion of product
offerings, reward programs, and mobile payments.
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