Union Budget 2021 will boost mobile payments market in India

The COVID-19 pandemic has disrupted the global financial markets and the digital payments space is no different. Amid the rising fears of infection and the subsequent imposition of lockdown measures and travel restrictions, people preferred digital mode of payments. Against this backdrop, the Indian government’s decision to provide INR15bn (US$0.2bn) will further facilitate the growth of the mobile payments market in the country, says GlobalData, a leading data and analytics company.

GlobalData’s Payments Sector Scorecard, ranks companies on 10 disruptive themes that matter most to the payments market, reveals that Paytm, the leader in India, ranks eighth out of 36 companies with a score of 5 (out of 5) for mobile payments. Its nearest competitors in the country are Amazon (ranked first) and Alphabet (ranked 11th).

Swati Verma, Associate Project Manager Thematic Research at GlobalData, comments: “All three companies want to become super apps by integrating services such as shopping, content streaming, groceries, cloud storage, and ticket bookings under one umbrella. Paytm has added gaming, ticket booking, and e-commerce on its own platform in the past couple of years, leaving Alphabet, Amazon and Flipkart racing to catch-up.” 

The move to allocate INR15bn is expected to help domestic players such as Paytm and Flipkart to accelerate their expansion while competing with giants like Google and Amazon.

Ms Verma concludes: “This is a golden opportunity for players like Reliance Group and MobiKwik, which are aggressively expanding service offerings on their apps. Facebook (ranked 20) is also vying for a share in the developing Indian payments market. Having partnered with Reliance to build an e-commerce service on Reliance’s service, Facebook launched WhatsApp Pay in India in November 2020. However, it is unclear how it will be able to capitalize on this opportunity with recent changes in WhatsApp’s privacy policies and users switching to other apps.”