Indian Payments Industry Poised to Reach $49 Trillion by 2028 with Rapid Growth in Digital Transactions, Says BCG

Indian Payments Industry Poised to Reach $49 Trillion by 2028 with Rapid Growth in Digital Transactions, Says BCG

The Indian payments industry is expected to grow substantially, reaching a total transaction value of $49 trillion by 2028, according to estimates from Boston Consulting Group (BCG). This represents a 10% growth from the $30 trillion recorded at the end of 2023. BCG's report, exclusively shared with The Economic Times, also projects a sharp rise in transaction volumes, with a 25% compound annual growth rate (CAGR) pushing the total number of transactions to 434 billion by 2028, up from 144 billion in 2023.

Yashraj Erande, India Leader for BCG’s Financial Institutions Practice, pointed out that the volume of transactions will outpace the growth in transaction value. "We will see that the growth in payments volume will outpace value growth because margins from interchange will continue to shrink," he said, adding that automation and artificial intelligence (AI) would drive cost optimization.

Revenues from the Indian payments industry are expected to grow at a slower pace, increasing by 11% to $70 billion by 2028, up from $41 billion in 2023. The consulting firm highlighted that while fund transfers and credit card transactions would experience significant growth, other segments like debit cards, cheque payments, and prepaid cards would witness a decline.

The value of fund transfers is projected to rise to $47 trillion by 2028, a substantial increase from the $29 trillion recorded in 2023. Corresponding transaction volumes are expected to grow from 134 billion to 423 billion over the same period. Credit card transaction values will also see a boost, rising from $210 billion in 2023 to $563 billion by 2028, with the number of transactions increasing from 3.3 billion to 6 billion.

However, debit card payments are projected to decline, with transaction values dropping to $57 billion in 2028 from $75 billion in 2023, while the number of transactions is expected to halve, falling to 12.7 billion from 25 billion. Similarly, cheque-based payments and prepaid card transactions will see reductions in both value and volume. Cheque transaction values could fall from $867 billion in 2023 to $764 billion in 2028, and volumes may decline from 671 million to 310 million. Prepaid cards are forecasted to drop from $5.7 billion in transaction value in 2023 to below $3.5 billion by 2028.