 "Emerging markets including India to drive innovations in payments: PwC report")
Cutting-edge technology will reshape the next-generation payment systems, and emerging markets including India will be at the forefront of this transformation, says a PricewaterhouseCoopers (PwC) report.
According to the report, nearly 90% of people under 30 years reside in emerging markets and the same demographic also accounts disproportionately for online transactions.
"Given the underlying infrastructural issues in emerging markets, there needs to be a focus on developing the infrastructure both for issuing and acceptance of payments products and instruments," the PwC India FinTech Leader Vivek Belgavi said.
Belgavi further said, "Alternate payment instruments and modes like mobile wallets, virtual cards and accounts, social media and contactless payments are gaining traction for specific use cases, especially the unbanked customer base, driven by technology, customer needs and declining margin."
The report noted that the need for financial inclusion is driving new technologies and innovations.
Globally, two billion adults worldwide are unbanked and some of the lowest rates of financial penetration are in emerging markets.
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"Several governments are also making financial inclusion an integral part of their national plans. The Indian government, for example, launched the 'Aadhaar' card programme," the report said, adding, " Innovations leveraging the Aadhaar card are expected to assist the financially excluded segments with the explicit aim of removing financial untouchability."
Hugh Harley, Financial Services Leader for Emerging Markets, PwC said, "Given the large unbanked population and the growing regulatory agenda to engage these people into the financial system, emerging markets are in a unique position to drive growth in the payments industry."
While most transactions in emerging markets are still being made with cash, the shift to electronic and digital methods is happening rapidly, the report said, adding, "In India, debit card transactions have seen year-on-year growth of 43%, whereas the growth in credit card transactions has been along the same lines with 27%."