Indians Fast Turning to E-Payments - BusinessWeek

PwC estimates India's retail e-payment market will soar to $150 billion by next year thanks to growth among Internet and mobile phone users

By Swati Prasad

India's retail e-payment market is likely to grow by nearly 70 percent in the next two years. The value of retail e-payments should reach between US$150 billion and US$180 billion by 2010, according to a report by financial research and consulting firm Celent.

Prathima Rajan, analyst, Celent, said: "Ever-increasing technological changes, growing Internet access and mobile subscriber base, rising consumer confidence, and convenient delivery and payment models are the prime factors fueling this trend."

However, despite the high growth, customer adoption of electronic payment channels in India is still at a nascent stage, Rajan told ZDNet Asia in an e-mail interview.

Growing popularity of e-payments is also reflected in the market for plastic money. According to Celent, the Indian debit and credit card market grew at a compounded annual rate of 128.7 percent between 2004 and 2008 and is expected to reach 210 million cards by 2010.

The report expects debit card circulation to increase to 169 million by 2010, up from 102.4 million today, while credit cards should increase from 27.5 million to 40 million during the same period.

Mario Shiliashki, general manager, PayPal South East Asia and India, told ZDNet Asia in an e-mail: "E-payments are growing in popularity across the globe and India is no exception."

PayPal is increasingly being used in India for cross-border trade through e-commerce sites for the sale of gemstones, jewelry, electronics and household items and for services such as Web design, travel and digital content.

With 75 percent of its population below the age of 35, e-payments have enormous potential in India...