Digital payments in India has tripled to 7% of GDP from 2.5% three years ago, tie success can be partly attributed to the UPI-based payments system which provides a robust platform for electronic transactions and creating an ecosystem around it.
This new payment infrastructure deserves credit for the expanding mobile payments applications built around it that enable free and instant transfers between users' bank accounts, including the government-sponsored BHIM and Google's Tez. The Immediate Payment System (IMPS) has provided a similar service since 2010, though transfers involve a fee. Mobile wallets (considered prepaid instruments under law) represent the third major rail for mobile payments. Altogether, the infrastructure is connected to and interoperable with 800 million bank accounts, indicating the potential for further growth.
While UPI's success has been driven in part by its convenience and free usage, the largest share of recent growth has come from new entrants like Tez, which uses the UPI payment rail, offering promotional cash for new customers. Some of these customers are reportedly churning low value peer-to-peer transactions among their personal network for the chance at cash awards.
It said that in just four months of launching its payments app, Google is already processing the same number of digital transactions as Axis Bank (4th highest among banks in India) and has resulted in unified payment interface (UPI) transactions increasing about eight times. This underlines the massive success of UPI in creating a conducive ecosystem which has already started registering a huge change in Indian payment context.
How Mindgate Solutions Powers This Change
Mindgate has been in the forefront of India's digital payments revolution. Its singular focus on delivering best of the breed solutions has made it the digital payments partner of choice for Indian banks, financial institutions and large corporations.
Leading banks like HDFC, SBI, BOB, Yes Bank, IndusInd, Citi, HSBC have partnered with Mindgate for their digital payment platforms. In a short span of time it has provided seamless payments and collections support to 3000+ customers on its Host to Host platform. Leading aggregators leverage on its V-transact payment gateway platform. We have also partnered for PFMS, BBPS and NETC for many banks.