Digital payments are currently a tiny part of the way people shop in the country. But the government’s leading think tank, the National Institution for Transforming India (NITI Aayog), forecasts the market will grow into a trillion dollar industry within five years, the Business Standard reports.
Industry experts say Google, Facebook and Amazon, who use the Unified Payments Interface (UPI) in India, may now start to leverage the rich payments transaction data they harvest to generate more retail sales, the Standard reports.
Google has already launched a shopping homepage in the country and Facebook, which owns Instagram, is planning to launch shopping via the Instagram platform.
“Shopping on Instagram is currently available to businesses in 46 countries, and we are gradually expanding to additional partners in countries around the globe, including India,” an Instagram spokesperson told the Standard. Amazon is already a leading e-commerce player in the country.
The potential to move beyond simple commerce is enormous, say industry observers.
“The digital payments opportunity seems to have certainly caught the eye of global technology giants, who are creating platforms for all encompassing engagement of end customers,” said Kalpesh J Mehta, partner at Deloitte India.
“Commerce is a big use-case, and payments is an essential part of commerce. Payment behaviour is seen to generate data sets, which lets such platforms enrich their customer profile, and that can be consolidated and monetised.”
Payments data can be effectively used to target consumers with retail products, and, by analysing payment histories, also used to create new revenue streams in the form of offerings such as loans and other financial products.
UPI has seen huge growth in India, with the number of transactions last month passing half a billion, with a total value of Rs 822.32 billion.
And yet, according to one study, the entire retail market was worth Rs 49 trillion in 2016–17, of which just Rs 3.5 trillion is organised retail, and a mere Rs 700 billion is e-retail.
The focus on payment tech comes as data uncovered by WARC’s Marketer’s Toolkit 2019 reveals customer experience is seen as key to driving growth, payment technologies a vital element for marketers they examine the smoothness of the overall customer experience.
Sourced from the Business Standard, WARC