Transactions through India's homegrown Unified Payments Interface -- which allows mobile apps run by retailers, airlines and other firms to take payment directly from bank accounts -- reached almost half the value of debit and credit cards swiped at stores last month, central bank data show.
The surge in UPI transactions has taken place since 2016 when the interface was set up by an umbrella organization of Indian banks. Mastercard, in contrast, has built up its business in India over three decades.
India's payments system was alone among more than 40 countries tracked by Fidelity National to gain a top score of five for innovation and customer value. China's Internet Banking Payment System scored two and Kenya's PesaLink scored four. Criteria included round-the-clock availability, speed of settlement, and level of government or regulator support.
Amazon.com Inc. and Jet Airways India Ltd. -- the nation's second-biggest airline by passengers -- are among firms that have integrated UPI into their apps in order to take payment from customers. Ola, a local rival to Uber Technologies Inc., Big Bazaar, a chain of stores run by billionaire Kishore Biyani, and incumbent mobile wallet leader Paytm Mobile Solutions Pvt. are other users.
Currently, India's payments market is worth less than $200 billion, dwarfed by China's $27 trillion market that's now opening up to global players.
Advances in India's digital payments market picked up pace after Prime Minister Narendra Modi's shock decision to invalidate 86 percent of the country's currency in circulation.
"While the effects of the demonetization event of November 2016 are now waning, it would be safe to conclude that the event has caused a permanent uplift in the share of non-cash transactions in the economy," said Credit Suisse.
Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on ndtv.com/elections. Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections.