Companies including Google, Facebook, Amazon, and Walmart are all vying for the top spot.
Google Pay mobile payments are proving to be a powerful tool in parent company Alphabet’s strategy to grab leadership in India’s online shopping, social networking, streaming, and gaming market, which is experiencing explosive growth.
The digital wallet was propelled forward during the pandemic to become second most popular.
The pandemic’s acceleration of contact-free transactions gave Google Pay mobile payments the boost it needed to grab the second highest app spot in the category in India. Meta Platforms (Facebook’s parent company) and Amazon are also among the American companies pushing hard to grab the biggest possible portion of the wallet apps in the subcontinent. They’re up against rivals such as Paytm and PhonePE, both from India, and that are backed by China’s Alibaba and the US’ Walmart, respectively.
“All these players are in the market simply because they want to ride on India’s digital growth story, and payments are critical to building a digital economy, something that China has demonstrated,” said S&P Global Market Intelligence fintech analyst Sampath Sharma Narinyanuri.
Mobile payments in India experienced a 67 percent growth rate in 2020, reaching $478 billion.
According to S&P Global, smartphone-based transactions rose by 67 percent in the first year of the pandemic. That said, this trend did not stop in that first year. In 2021, smartphone application-based transactions were headed for $1 trillion in the country, based on August volumes, according to Nariyanuri in a media interview.
Nariyanuri also pointed out that the growth rate is based on a low base for transactions per capita. That said, based on the country’s GDP, smartphone-based transactions rose to 23 percent during 2020’s last quarter. Comparatively, the fourth quarter of 2019 was only 12 percent.
That said, it’s important to point out that profits haven’t quite reached a celebratory point quite yet. This is because a substantial amount of the yearly growth has been driven by low-value consumer-to-consumer transactions, which currently represent an estimated 80 percent of total smartphone-based transactions.
That said, this is expected to take off and continue growing through the foreseeable future. For instance, Paytm forecasts that by 2026, the mobile payments market in India will reach $3.1 trillion in value.
