India?s about-R2.5-lakh-crore card payment industry can double its size in the next three years as non-cash transactions are growing at a healthy rate, feels Nitish Asthana, executive director, ICICI Merchant Services – First Data Corporation India. In an interview with Mithun Dasgupta, he says smartphones will play an important role in the growth of e-payment. Excerpts
What is the total size of the electronic payment transaction industry in India?
The card payment industry is growing at 25-30%, and it has doubled over the past five years to nearly R2.5 lakh crore. The sector has advanced rapidly due to increasing consumer demand and rising awareness. With substantial support by the government, there has been great progress in security standards for both point-of- sale (POS) and internet transactions, and this has further facilitated electronic payments.
India is still a nascent e-payment market and is growing off a relatively lower base, and a lot needs to be done to make it a truly less-cash one, such as activation of debit cards for purchasing and growth of the terminal infrastructure. Over the next three years, the size of the card payment market can grow to R5 lakh crore.
Apart from government support, which factors have contributed to the industry?s high growth?
Non-cash transactions are increasing at a healthy rate with people now experiencing two-fold advantage: convenience and ease of payment, and heightened security. The use of plastic money has accelerated since2011, which stands as an example of how cashless transactions are gaining over the traditional payment route. But, the industry is still polarised in the top 20 cities and much needs to be done to roll out the infrastructure and stimulate debit card users to go cashless, especially in smaller centres.
What kind of growth potential do you see?
The future looks upbeat for mobile payments, and smartphones will play an important role in their growth. As per our research in ?Universal Commerce?, over 60% smartphone users have used their phones to buy online at some point. The rush to provide retailer apps on the phone is now real, and the ones that attract repeat purchases are turning out to be most popular, such as cinema booking, online travel and e-tailing.
Mobile POS is a real solution to capture on-the-go payments from consumers to merchants, and to grow terminal acceptance infrastructure cost-effectively. I expect these two areas to power growth.
What is your growth approach?
ICICI MS is a fully integrated payment company with solutions across point of sale, e-commerce payments and mobile. With over 200,000 merchants across 650 locations, we cover a range of merchants, from the local kirana store to the largest modern retail and e-commerce players. We are in the centre as the e-payment story unfolds with growth in tier-2 cities, especially with smaller merchants.
The internet and mobile payments are our priority areas, and we would like to improve user experience in payments.