India, with a population of 1.237 billion, is seeing an ongoing increase in online payments and is expected to exceed offline card payments in a few years.
The numbers, which were reported by The Times of India are due mostly to debit card transactions, which are more widely utilized than credit cards and according to Uttam Nayak, country head of Visa International: “Growth in online payments is being driven by utility payments, travel and ecommerce.” He also points out that online payments are certain to grow further given that a mere 5 – 10% of 125 million internet users make online payments.
According to a Google report produced at the end of 2012 and discussed on Pitch On Net, 2012 was the “tipping point” for online shopping in India with 128% growth in consumer interest. It also said, about consumer interest, that electronics were number one, followed by apparel and accessories, but that apparel generated more sales. Google also revealed preferred payment methods being: cash on delivery, followed by debit cards and then credit cards.
A survey conducted by Nielsen in July 2013 titled “Smartphone Incidence in Urban India” reveals that there are 27 million Smart-phone owners in Urban India, which constitutes 9% of overall mobile usage in urban India. Among other data, the survey also shows that 8 million smart phone users do their banking and shop using their smartphones.
A relatively recent alternative payment method called m-pesa has been introduced in India and has penetrated more remote regions where a basic mobile phone user, can make payments and transfer money using this e-wallet-like solution (connected to mobile network operator, Vodafone). This has extended e-commerce in India and is a possible payment option for e-merchants who wish to enter the market. Services such as LIPA NA M-PESA have been created to make this possible.
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Much like the world at large, India is changing, and e-commerce is developing to adapt to the needs of an evolving population. The expansion of internet access is the most obvious contributing factor but in addition to this, competitive online pricing, a growing middle class, busy lifestyles and the need for convenience as well as other social factors are all catalysts towards online expansion.
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