70% Year-on-Year Growth in Merchant Demand for Digital Payments: Razorpay

  • Utilities sector shot up tremendously to 17% in FY’19 from 2.4% in FY’18
  • 7x growth in UPI adoption throughout 2018

Bangalore, April 9, 2019 - India’s first converged payments solution company, Razorpay, launched their first edition of ‘The Era of Rising Fintech’ report in Bangalore today. It is aimed at providing an in-depth intelligence of the agilely evolving Indian fintech ecosystem and its impact on SMEs. The report analyses digital transaction modes, online spending patterns, impact of UPI and other game-changing industry innovations, which are taking the country a step closer towards a digitally inclusive economy.

Some of the key findings from Razorpay’s report include:

-  Non-cash transactions are likely to overtake cash transactions in the country by 2023

-  Since demonetization and the launch of UPI, the merchant demand for digital payments has increased by 70%, year on year

-  UPI has also made its way successfully to cities like Kolkata, Ahmedabad, Lucknow and Ranchi

-  Share of wallets (P2M) has dropped sharply to 1.87% in FY’19 from 6.3% in FY’18, while UPI payments shot up from 1.6% in FY’18 to 17% in FY’19

-  The UPI Transactions grew by 4000% in 2018

-   Of the top three sectors, Travel, Utilities and E-Commerce, Utilities shot up tremendously to 17% in FY’19 from 2.4% in FY’18, indicating how Indians are adopting digital payments in everyday life

-  Pune, Chennai, Bangalore, NCR, Hyderabad and Jaipur are the most active cities transacting digitally

Nationally, while the debit and credit cards continue to dominate the P2M segment with a 56.48% share, Razorpay finds that SMEs in Tier 1 and 2 cities are driving a high-speed growth of 75% in non-cash transactions.

Preferred Payment Method in Person-to-Merchant (P2M) - Share in FY’18 Vs. FY’19: 

Method Card       NB          UPI         Wallet

FY’18     69%       22.3%    1.6%      6.3%

FY’19     56.48%  23.8%    17%       1.87%

Top 3 Sectors - Contribution in FY’18:

Sector   Travel    E-Commerce      Pharma

FY’18     42.5%    22%       8.2%

Top 3 Sectors - Contribution in FY’19:

Sector   Travel    Utilities E-Commerce

FY’19     42%       17%       16%

Harshil Mathur, Co-founder & CEO, Razorpay said, “The sky-rocketing demand for digital payments signifies a lot more than just business growth. We saw that the SMEs in Tier 1 and 2 cities are driving a solid growth of 75% in non-cash transactions. This is a testimony of growing trust, changing mindset of traditional businesses and focused effort of government and public authorities towards developing the fintech infrastructure.”

“In the coming months, we are looking at more game-changers like eNACH/eMandate, improved mobile-tech, more SME-oriented products and services, and stronger collaboration between fintech services community and banks. Among the many sectors embracing digital payments, the fact that Utilities shot up tremendously to 17% in FY’19 indicates how consumers are responding to digital payments. Fintech is transforming the way Indians buy and sell and Razorpay is thrilled to be an invaluable part of this process,” he added.

Razorpay predicts that by 2020, 40% of digital payment transactions in the country will be driven by Tier 2 and 3 businesses and consumers, and 50% of internet users will be using digital payments. The Razorpay report also expects that 15% of India’s GDP will be flowing through digital payments by 2020. All findings in this report are based on transactions held on Razorpay platform from FY’18 to FY’19.