The Evolution & Future of India's Digital Payments Industry


The Evolution and Future of Digital payments industry: In Conversation with Sameer Nigam, Founder & CEO, PhonePe

India’s digital payments landscape has witnessed phenomenal growth over the past five years. As digital payments become ubiquitous, there is considerable scope for growth to propel India to become a cashless economy. To talk about these opportunities and the drivers that will help unlock the massive potential, PhonePe Pulse in collaboration with the Boston Consulting Group (BCG) released an exclusive report titled, “Digital Payments in India: A US$10Tn Opportunity”.

In addition to the report, PhonePe Pulse also launched the ‘Beat of Progress’ podcast series that brings engaging conversations with leaders and industry experts who share their views on the digital payments landscape. Hosted by Karthik Raghupathy, Head of Strategy & Investor Relations at PhonePe, the inaugural episode witnessed a candid and in-depth discussion with Sameer Nigam, Founder & CEO at PhonePe.

Here is an excerpt from the wide-ranging discussion which included the genesis of PhonePe Pulse, opportunities in the digital payments arena, and innovations in the offing.

Fintech industry - Beneficiary of a unique ecosystem:

Starting the conversation, Sameer opined that the fintech industry has been the beneficiary of a unique ecosystem and public private collaboration platform initiatives such as the UPI. While the world is abuzz with Web 3.0 and decentralised systems, India has already taken the initiative with the massive adoption of UPI, Aadhaar enabled systems, FASTag, RTGS, NEFTs, APIs that are based on decentralised systems. Having benefited from the ecosystem, he mentioned that as the market leader, we wanted to give back to the ecosystem in equal measure.

Pulse – unleashing the power of information for the ecosystem:

The dearth of reliable granular data on macro and micro indicators in the digital payments space led to the creation of Pulse – India’s first interactive geo-spatial platform on digital payment trends. He shared, “As we started processing billions of transactions every month, we wanted to harness all of that data in an anonymized and secure way to unleash the power of information for academia, think tanks, and policy makers helping unlock opportunities for others to build in India”.

Massive adoption of digital payments:

Talking about the mass adoption of digital payments, he shared that while over 250 million Indians have adopted digital payments, there are still 600-700 million Indians to be educated and onboarded. UPI has been the vanguard that propelled the wheels of digital adoption, supported by liberalisation of licenses by the Government, strong public-private partnerships, and interoperability without any additional infrastructure requirements except a cell phone. Such proliferation of digital money has put the spotlight on the consumers, who are the undoubted beneficiaries of a plethora of digital options at their disposal.

Forward-looking drivers for the industry:

Speaking of innovations in this space, Sameer opined that the convergence of systems supported by one touch payments and other technological efforts will be game changers. Additionally, RBI’s tokenization mandate will further convince sceptical users on the benefits of cashless means of payment. On the anvil are exciting times with UPI, a made-in-India stack going international, other initiatives like UPI lite and UPI 123, which is a boon for feature phone users, and UPI Aadhaar, offering respite to early adopters.

Large window of opportunity:

Providing insights on the opportunities for growth for the fintech ecosystem, he shared that public-private alliances in the digital landscape are strengthening the pillars for health, education, commerce, and the democratized network models are aiding holistic economic development. Government propellers such as ONDC, Edtech reforms, the Aarogya Setu App are solutions that are working relentlessly towards sustainable economic success. He further highlighted areas that are yet to reap the benefits of this digital explosion which include the transportation industry, supply-chain networks, and small-scale businesses.

Concluding, Sameer shared that PhonePe Pulse will assist policy makers and entrepreneurs in making informed decisions that will facilitate in taking the baton of the digital economy forward.

Watch the full video of the conversation here