Prepaid payment instruments like mobile wallets registered fastest growth in the digital payment space in 2017 by increasing their share in the digital payment space by almost three-fold in one year, and shrinking the share of credit/debit card payments.

PPIs witnessed a massive jump of 277 per cent last year over 2016.

The share of PPI transactions in digital payments grew from 5 per cent to 14 per cent as digital wallets gained popularity post demonetisation, as per the data from payments firm Worldline.

The transaction limit was raised to Rs 20,000 and the wallets have been offering discounts and cashback to increase usage. RBI is also in the process of allowing interoperability between PPIs, indicating stronger growth ahead.

As per Capgemini’s world payment report 2017, mobile wallet industry in India will grow to $4.4 billion by 2022 with projected compound annual growth rate of 148 per cent over five years.

This growth of digital wallets in India will be much higher than the overall growth of the digital payment ecosystem. Other non-cash transactions, including UPI and other inter-bank digital transactions, will only be growing at a CAGR of 26.6 per cent till 2020. In comparison with PPIs, debit/credit cards grew at a moderate pace of 16 per cent in 2017. No wonder, they shrunk their share in the digital payment pie from 63 per cent to 54 per cent.

Overall, digital payments recorded a growth of 30 per cent in 2017. While the average growth rate of POS terminals between 2011 and 2016 was 21 per cent, between September 2016 and 2017 the terminal numbers swelled by 96 per cent.