The Indian government’s pro-digital policies are having a significant effect on behavior in that country. That is according to the Internet Trends Report, a wide-ranging presentation published annually by venture capital firm Kleiner Perkins.
The 2017 report puts hard numbers to some of the global digital payments trends we’ve been watching at PaymentFacilitator.com – trends that have been creating opportunity for dominant payment facilitators. Here are a few of the highlights.
China: mobile payment volume doubles
Mobile payment volume has doubled year over year in China to over $5 trillion. The market there is dominated by two companies: WeChat, with 40% of the market, and Alipay with 54%.
The report said that small ticket transactions are growing particularly fast, with nearly 80% of transactions below $15. The convenience of mobile transactions is the most common reason for using them over cash or cards.
The growth of these payments is opening the door for Chinese companies like Alipay to offer more financial services, including lending, insurance and credit rating, the report said.
India: government policies support digital infrastructure
India is second only to Nigeria when it comes to percentage of internet traffic that happens on a mobile device, the report said. Almost 80% of the country’s internet traffic is mobile-based, in contrast with a global average of 50%.
The report credits the Indian government’s pro-digital policies – including not only demonetization but also policies that have broadened access to broadband service, for example – as laying a foundation for a digital infrastructure it says is benefitting consumers.
According to the report, the use of the Aadhaar personal ID system is growing rapidly, being used for more than 16 million authentications per day, vs. only 3 million last year. The system is now used by 82% of the population.
At the same time, the government-backed Bharat Interface for Money (BHIM) payments app saw 17 million downloads in its first two months.
Against the backdrop of this intense focus on India’s digital payments infrastructure, leading Indian payment facilitator Paytm has grown exponentially. The number of registered users for the service has grown from 22 million just three years ago to 215 million this year.
Since demonetization last November, the monthly transaction volume for payments conducted using the Indian government’s Universal Payments Interface (UPI) has exploded, from $15 million to $359 million.