India has established itself at the center of digital payment innovation, driven by e-commerce, consumer behavior, and progressive government approaches. There is a growing preference for contactless payments among the consumers, with the Reserve Bank of India supporting this intention by raising the contactless payment limit to INR 5,000 up from INR 2,000, an increase of 150%.
India’s digital trajectory has been accelerating for a while. India has unveiled e-RUPI this fiscal year, a new digital payment system that is neither cryptocurrency nor central bank digital currency (CBDC). India and Singapore have also linked their digital payment systems, in a major push to enable instant and low-cost cross-border remittances which amounts to ~USD 1Bn+ annually.
India is now at the fore of digital payment innovation, and recent moves toward tokenization to maximize security are boosting the country’s status as a digital forerunner.
The benefits of tokenization in e-commerce, travel, retail and many more sectors range from compliance, extra layer of security, increased customer trust, and reduced breaches and frauds.
It is estimated that India’s digital payments industry will grow by more than 3-times by 2025, which is impressive to even envisage, considering that India has a massive unbanked or underbanked population. The government is driving financial inclusion, for this very unfortunate second-largest unbanked population of the world.
The timely introduction of tokenization regulations by the RBI and the government’s commitment to digital technologies has cemented India as a proponent of digital innovation. A holistic payments system will be key to India’s economic success, with innovations that provide optimal customer experiences.
