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$271 billion in consumer spending to shift from cash to cards and digital payments by 2023 in India: Accenture

About 66.6 billion transactions worth $ 270.7 billion are expected to shift from cash to cards and digital payments by 2023 in India, and grow further to $856.6 billion by 2030, according to an Accenture report on Tuesday.

This rapid shift to digital payments due to the COVID-19 pandemic urgently increases the need for banks to modernize their payment systems, the report titled ‘Playing the Long Game in Modernizing Payments’ said.

The report is based on a survey of 120 payment managers at banks around the world regarding the transformation of their payments business, as banks make multi-year investments to compete with non-bank digital payment providers and comply with new regulations.

Carried out between July and August of this year, the report studied markets such as Australia, Brazil, Canada, China, India, Norway, Singapore, Thailand, United Kingdom and the United States. United. He noted that the expected decrease in cash volume is based on assumptions from GlobalData and Accenture Research.

In addition, the forecast of non-monetary transactions in consumer spending is calculated using the cash flow trend data and MSC rates provided by GlobalData.

“In India, 66.6 billion transactions worth $ 270.7 billion are expected to shift from cash to cards and digital payments by 2023 – and grow to $ 856.6 billion by 2030, “he said.

The swift shift to digital payments has put additional pressure on banks, with three quarters (75%) of bank executives surveyed saying the pandemic has increased the urgency of their payment systems modernization plans, the report added. .

COVID-19 has accelerated the shift to digital payments at a rate banks could not have predicted. The pandemic will permanently change the way consumers buy and pay for their products as they put convenience above all else, Sulabh Agarwal, who leads Accenture’s global payments practice, told me. .

He added that while banks’ investments in new payment systems have mainly focused on meeting compliance deadlines, how they will generate value in the future is by embracing the changing consumer dynamics and improving customer experience.

While India has been ahead of the curve in terms of real-time digital payment infrastructure driven by UPI and 24×7 NEFT, the pandemic has led to a further rise in digital contactless payments as consumer behavior has undergone a change, “Sonali Kulkarni, Manager – Financial Services, Accenture India, said.

With new players launching their payment offers and increased use of ‘Buy Now, Pay Later’ programs, the experience and convenience for consumers are sure to improve dramatically, she added. .

Indian banks have made multi-year investments to modernize their payment systems, and in the future we expect them to step up these investments to scale up and improve the resilience of their digital payment operations, he said. she declared.

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