In my opinion , the latter statement is most likely true . Here ' s why-the aforementioned joint report by Google and The Boston Consulting Group states that by 2020 , the size of the digital payments industry in India will be $ 500 billion ; contributing 15 per cent to India ' s gross domestic product . By 2020 , non-cash contribution in the consumer payments segment will double to 40 per cent and Indian consumers , are 90 per cent as likely , to use digital payments for both online and offline transactions . The drive to demonetize is more than likely to fuel this growth . Meanwhile , another joint report authored by The Associated Chambers of Commerce of India and RNCOS , substantiates this statement . According to them , the mobile payment transaction volume in India is set to witness an over 90 per cent increase each year , over the next five years . The transaction volume is expected to have a compound annual growth rate of more than 90 per cent to reach 153 billion by 2022 . Here ' s the interesting bit-it has been valued at 3 billion this year . Quite a jump , this ! In short , the overall picture looks quite rosy , with a strong case for digital payments . Now , let ' s break down the argument further . For India to become a “ cashless economy ” through and through , the argument must be examined from two aspects-the customer and the merchants , respectively . For the former , a plethora of digital payment mediums are available today , apart from digital wallets . Broadly , these include ( but aren ' t limited to ) bank cards , the Aadhar-enabled payment system and the Unified Payment Interface ( UPI ). Another interesting initiative is the Prime Minister ' s Jan Dhan drive , which has boosted banking penetration in India . For a holistic picture , though , bank-backed wallets should be used to fill up the remaining gaps . These seem viable , given that they ' re cost effective , easy to adopt and can be rolled-out rapidly for unbanked consumers . Of these , in my opinion , UPI is likely to emerge as a game-changer in these times . Why ? Well , in a nutshell , UPI is a payment infrastructure that permits mobile banking or wallet customers to transfer money to customers of any other bank and pay merchants . It also permits customers to receive mobile payments without disclosing the details of their bank accounts . In fact , it even addresses a very critical aspect-customer experience . UPI essentially ensures a seamless transaction and reduces the time taken for the same . This is because the customer is required to only enter a single identifier , i . e . a virtual payment address . But , don ' t take my word for it . In so far , 28 bank apps in the country have UPI facility . It garnered 175,000 active customers in just a week . Enough said . Now for the merchant ' s perspective . Traditionally , India has never been deemed as a point-of-sale ( POS ) friendly country . As per data released by the Reserve Bank of India , the number of online POS machines , as of August 2016 , stood at 1,461,672 . Quite dismal , especially given the kind of customer numbers one usually considers ! Now , though , the situation is expected to change . Interestingly , as per news reports , merchants are now approaching banks to obtain POS machines . Not surprising , considering the kind of impact the demonetization drive would have had on their business ! Permit me to cite an example from our own business-we witnessed an increase in the adoption of mobile POS , where our customers have reported a 500 per cent increase in order for POS devices . A small step , no doubt , but a solid one , nonetheless ! All in all , it looks likely that digital transactions will become the de-facto payment mode in India . Cashless times beckon , is India ready ?
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