India’s card payments market to grow 31.2% in 2022

Growing adoption of electronic payments will help push up the card market.

India’s card payments market is expected to grow by 31.2% and equal $305.4b (INR22.3t) in value in 2022, according to data and analytics GlobalData.

Economic recovery post-COVID, driven by a widespread vaccination program, gradual recovery in consumer spending, and growing adoption of electronic payments, will support this growth.

The card payments market is expected to be valued at $232.7 (INR17t) by end-2021, a 30.7% increase from 2020.

Although lockdown measures amid COVID-19 affected the country’s card payments market, the pandemic also highlighted the importance of digital payments, noted Nikhil Reddy, payments senior analyst, GlobalData.

“With India now on path to normalcy, card payments are expected to rise further in the coming years,” Reddy added.

The government’s commitment to reduce the usage of cash and drive the use of card and digital payments will also support its growth in India, Reddy said. Authorities abolished merchant service fees on RuPay card transactions from January 2020, encouraging merchants to accept payments with RuPay cards.

The central bank has also allowed banks to increase cash withdrawal charges from 1 January 2022.

The rising adoption of contactless card payments is also expected to drive card payments in the country. Although contactless card payment is not very popular in India, it gained traction during the pandemic due to the rise in demand for ‘touch-free’ payments, Reddy said.

Just in January 2021, the limit to contactless payments was raised from $27.4 (INR2,000) to $68.5 (INR5,000).The acceptance of contactless card payments among merchants is also on rise; as of 2021, over one-fourth of total POS terminals installed in the country now supporting contactless payments.