"BCG projects that more than 50 per cent of India's Internet users will use digital payments by 2020, when the size of digital payments industry in the country will be USD 500 billion," the report by global telecom body GSM Association and Boston Consulting Group said.
The report was prepared over BCG research in six countries -- Brazil, China, Germany, India, South Korea and the US.
As Internet adoption and use rise in India, the government and others are increasingly turning to digital solutions to long-standing problems, it said.
The report counts government's plans to build 100 smart cities across the country and 'Digital India', which aims to increase the optical fibre network to thousands of villages where two-thirds of the population lives.
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"The opportunity for expansion of service delivery is huge as the number of connected Internet users in India is expected to more than double in the next few years to as many as 550 million. New users are expected to comprise more older people, rural residents and women," the report said.
"Almost the entire adult population carry Aadhaar cards that facilitate electronic payments, and the electronic payment industry today encompasses telcos, banks, wallet companies and e-commerce firms," the report said.
The report appreciated India along with China, Colombia and Uruguay for use of digital and mobile technologies for creating educated and digitally literate user base.