 "E-commerce")
The tech savvy generation between the ages of 15 and 34 will be one of the key drivers of growth for electronic payments in emerging markets, said a new report by PwC on Tuesday.
Nearly 90% of people under 30 reside within the emerging market. Based on PwC research in India, this is also the age segment that accounts for most online transactions.
According to the report, by 2019, 800 million people will have access to online payment options in India and 80 million users will be transacting over online channels, with internet users reaching 900 million and those with household income above Rs 20 lakh touching 125 million.
In 2014, while internet users in the country stood at 302 million and those with households income more than Rs 20 lakh were 50 million, there were 400 million users with access to online payments options and 20 million users transacting over online channels.
In 2014, while internet users in the country stood at 302 million and those with households income more than Rs 20 lakh were 50 million, there were 400 million users with access to online payments options and 20 million users transacting over online channels.
The report noted that the population between 15–34 years in India and Indonesia will move to the next age level over the next ten years and continue to transact online, thus increasing the percentage of active users by at least 15%.
"This age group also has a strong appetite for new technologies. It is this tech-savvy generation that has transformed digital solutions from being a convenience to an essential part of how people transact," it said.
More than 50% of consumers in the age group 18-24 are likely to try new technology-enabled payment tools.
"Whether it’s renting movies, purchasing coffee or reserving a rental car, providing an alternative payment option that caters to the increasingly digital lifestyle of the consumer has great potential for merchants to gain a new generation of loyal customers," the report said.
"The millennials’ comfort with technology is driving businesses to provide new and more innovative ways of enabling transactions, reflecting the demands of this tech-savvy generation," added the report
Meanwhile, the proliferation of smartphones and tablets, internet/mobile access, which is serving as a convenient, cashfree and card-free financial transaction medium, is helping to promote financial inclusion.
There is an exponential growth in mobile phone penetration in emerging markets, which now exceeds 100% in countries like Brazil with 141 handsets per 100 population. South Africa, India and China have mobile penetration rates of 90%, 84.6% and 76%.
"Mobile wallets in markets such as India, China and Nigeria have had a massive impact on financial inclusion, with people moving from no previous banking history to being able to make payments via a mobile phone, the report said.
"With a majority of the world’s population living in the emerging markets, these economies will be at the forefront of innovation and the adoption of mobile technology for payment."
For instance, mobile banking transactions in India tripled between 2012 and 2014, hitting 150 million in 2014, while mobile-wallet transactions have gone past m-banking transactions.
Another key driver for the growth of e-payments in India is Aadhaar.
"Innovations leveraging the ‘Aadhaar’ card are expected to assist the financially excluded segments with the explicit aim of removing financial untouchability," PwC said in the report.
"Because of Aadhaar, Indian payment industry thus stands out and is driving above-average growth in non-cash payments," said the report.
