Banking on mobile: Mobile banking to touch $3.5 trillion by FY22

By: | Updated: September 28, 2015 1:03 AM

INDIA’s payments market at $15.5 trillion in FY15 (excluding inter-bank clearing and CCIL) will likely see rapid changes in payment channels; while growing at 12% CAGR.

INDIA’s payments market at $15.5 trillion in FY15 (excluding inter-bank clearing and CCIL) will likely see rapid changes in payment channels; while growing at 12% CAGR.
* The share of mobile at 0.1% may rise to 10% in 7 years; with the value of mobile banking rising 200x to $3.5 trillion changing the payments’ markets.
* The share of retail electronic payments (NEFT); cards and payments through PPIs (mobile wallets, etc.) that currently account for <10% of total payments may rise to +30% in 7 years as people increasingly get more used to cards and mobile wallets.
* People are likely to use mobiles for making payments through all key channels including even RTGS in the future. Payment through paper may fall to <2%.

Gr7

Banks that are aggressively launching an integrated “digital platform”, have large customer base and market leadership are expected to be the biggest gainers of the shift in the payments market and the surge in rural banking.

HDFC Bank, market leader in payments and retail loan market, should be the biggest beneficiary followed by SBI, ICICI Bank and Axis.

The surge in mobile banking should facilitate faster financial inclusion, allowing banks to reach the last mile. Rapid adoption of mobiles by India’s youth coupled with falling cost of smartphones and banks’ aggressively leveraging the UID and biometrics to drive penetration should hugely facilitate financial inclusion.

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