Google is now head to head with Axis Bank in digital transactions.
As global tech giants enter the market as aggregators for retail transactions, banks face competition with their payments capabilities. A Credit Suisse research shows that in just four months after launching its payments app, Google is already processing the same number of digital transactions as Axis Bank, resulting to the ~8x increase in unified payment interface (UPI) transactions.
Here's more from Credit Suisse:
WhatsApp, with 230 million daily average users, is by far the most popular app in India and as it soon plans to integrate a payments button, digital payments are set to explode and we estimate a $1t market over the next five years.
Cash share in India is still estimated at 70% in value terms (90% in volume) and digital currently only aggregates $200b.
Mobile payments in India are being built on the public infrastructure of UPI and Aadhaar that allow an open-architecture and interoperable payment system to evolve. With 800 mn bank accounts now linked, the bulk of existing bank accounts are mobile-transaction ready. The top four banks—SBI, HDFC Bank, ICICI, and Axis—together account for over a third of bank system customer base but drive 60-70% of retail activity levels. The tech aggregators will primarily look to tie up with these franchises.
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