New Delhi, March 23,2023:  As unified payments interface (UPI)-based transactions continue to break all records, India’s e-commerce market is projected to grow from $83 billion in 2022 to $150 billion in 2026, as cash transactions decline further, a report showed on Thursday.

UPI recorded the biggest year-on-year growth of 74.1 per cent in transaction volume as of January 2023 and digital wallets grew from 5 per cent in 2019 to 35 per cent of POS value in 2022 stimulated by UPI, according to the ‘2023 Global Payments Report’ by global financial technology leader FIS.

With cash use declining from 71 per cent of POS transaction value in 2019 to just 27 per cent in 2022, India has emerged as a global leader in payments with the development of its next-generation real-time payments (RTP) infrastructure.

UPI has helped e-commerce account-to-account (A2A) payments grow to $12 billion, up 53 per cent from 2021 to 2022, the findings showed.

“UPI is driving consumers away from cash and helping to drive financial inclusion all at the same time, and is making India a leader in payments across not just the region, but the globe,” said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS.

The development of real-time payment schemes by other central banks — and, critically, the cooperation between those central banks — is also helping to fuel cross-border commerce, providing merchants with a significant opportunity for growth moving forward, he added.

While cash is still there, increasingly a majority of peer to peer transactions are done through UPI.

According to the data, cash is expected to decline by 34 per cent in transaction value by 2026 and digital wallets are expected to rise in transaction value by 88 per cent by 2026.

In the online space, the ecommerce market size is expected to grow by 82 per cent by 2026 providing a greater boost to digital payments.

The Reserve Bank of India (RBI) governor Shaktikanta Das said earlier this month that payments through UPI grew exponentially in the past 12 months, with daily transactions crossing 36 crore, from 24 crore in February 2022. In value terms, these transactions were worth Rs 6.27 lakh crore.