The Hindu Business Line : ‘E-payment market likely to grow 70% in next 2 years’

Bangalore, Oct.9 Electronic payment is poised for rapid growth in the country in the next couple of years, even though it is still in its infancy in the country and over 50 per cent of bills are still paid by cash.

In a recent report, “Payments in India Going e-Way,” Boston-based financial research and consulting firm Celent said the Indian retail e-payment market is likely to grow nearly 70 per cent in the next two years. The value of retail e-payment would be between $150 billion and $180 billion by 2010.

However, at present, only 17-20 per cent of bill payments occur electronically, and the majority of these transactions are in urban areas. Customers still prefer to pay standing “in line” rather than “online”, the report said.

The report said India is dominated by paper-based transactions in volume, but electronic payments have been growing at over 60 per cent in the last three years, with over 75 per cent transactions currently taking place via electronic mode. Electronic payment accounts for about 37 per cent of total payments by volume.

Driving factors

Newer technologies, growing Internet access and mobile subscriber base, rising consumer confidence and convenient delivery and payment models are the principal factors fuelling this trend, the report stated.

According to the report, there are 261 million mobile subscribers and 32 million active PC users, of which 68 per cent have access to the Internet.

With the growth of e-payments, the use of credit and debit cards has increased as well. The report said India has been one of the fastest growing countries for payment cards in the Asia-Pacific region.

Celent said it estimates the number of cards to increase to 210 million by 2010, compared to about 130 million at present.

There would be about 169 million debit cards and about 40 million credit cards.

However, credit cards will overtake debit cards in terms of transaction value as customers continue to use credit cards for purchases and bill payments, the report added.

The report said the e-payments processing market in India consists of a small number of large players, with some of the major players being TechProcess, which does both paper and electronic transaction processing, and BillDesk, which is an electronic transaction processing company.

Apart from these, there are players such as Venture Infotek, CC Avenues, and ABC payments that are exclusively focused on card-based payments and other related activities, the report added.

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