A recent report from UK-based analytics firm GlobalData projects that payments conducted via mobile wallets in India are poised to surpass Rs 531.8 lakh crore by 2028. This growth is anticipated to manifest at a compound annual growth rate (CAGR) of 18.3% from 2024 to 2028.

According to the report, the value of mobile wallet transactions in India soared to Rs 208.25 lakh crore ($2.5 trillion) in 2023, marking a remarkable growth fueled by a compound annual growth rate (CAGR) of 72.1% from 2019 to 2023. This surge is primarily credited to the government's initiatives in endorsing digital payment methods, notably the unified payments interface (UPI), an instant payment solution based on mobile wallets.

The Reserve Bank of India (RBI) has revealed intentions to extend the utility of Unified Payments Interface (UPI) by enabling cash deposits in banks through UPI at ATMs, broadening its scope beyond peer-to-peer (P2P) transactions, bill settlements, and merchant transactions. With a user base of 300 million as of October 2023, UPI will now facilitate payments from Prepaid Payment Instruments (PPIs) via third-party UPI applications, obviating the necessity for ATM or debit cards.

Shivani Gupta, senior banking and payments analyst at GlobalData, says, "India is one of the most developed mobile wallet markets in the world. Mobile wallets are now widely used for day-to-day transactions at supermarkets, grocery stores, and street vendors, as well as for online transactions. The rise in mobile wallet adoption is largely driven by UPI, which facilitates payments in real-time simply by scanning QR codes".

In February 2024, there were 1,210 crore transactions valued at Rs 18.44 lakh crore ($221.5 billion), representing a notable surge from the previous year's figures, where 750 crore transactions amounting to Rs 12.52 lakh crore ($150.1 billion) were recorded in February 2023, as per data released by the National Payments Corporation of India (NPCI).

Furthermore, UPI transactions experienced a significant surge, rising from 4,209 crore to 6,577 crore in the second half of the calendar year 2023, accompanied by a 44% increase in value from Rs 69.36 lakh crore to Rs 99.68 lakh crore during the corresponding period. PhonePe, Google Pay, and Paytm emerge as the major contenders in the UPI app market, commanding a substantial portion of transactions in both volume and value terms.