In the bustling streets of India’s cities and the quiet lanes of its villages, cash transactions have long been the dominant mode of trade. However, the narrative is swiftly shifting. Picture this: A small tea vendor in a remote village accepts payments with the customer quickly scanning a QR code. We know today that interaction is our reality. This seamless transaction signifies a broader transformation in India’s payments landscape, which leads us to the question: what is in store for offline payments in the near future?
The growing potential of offline payments:
According to the IAMAI, the demand for offline payment solutions is set to surge as businesses and consumers seek alternatives that cater to in-person interactions, even when internet connectivity is robust. The report highlights in-store merchant payments as a key use case for offline solutions, particularly in rural India. Further, with over 12 million kirana retailers in the country, the offline payment infrastructure could significantly streamline operations for merchants, many of whom are currently cash-intensive.
Key factors driving offline payments:
- Government initiatives and RBI’s vision: PwC decodes RBI’s vision in Payments Vision 2025, emphasizing the importance of financial inclusion. The aim is to bring the next billion users into the digital payments ecosystem. This vision is built on the foundation of the 5 Is (integrity, inclusion, innovation, institutionalization, and internationalization), four Es (e-payments for everyone, everywhere, every time) and underscored by six attributes—safe, secure, fast, convenient, accessible, and affordable payment systems. Offline payment solutions align perfectly with this strategy, offering secure and efficient methods for face-to-face transactions.
- India’s UPI Boom: Businesses and customers alike have embraced the UPI boom when it comes to in-store payments too. In May 2023, UPI accounted for over 78% of total retail digital payments in India and is expected to contribute 90% by FY 2026–2027. Razorpay POS has made it easier for businesses to accept digital payments in physical locations through its stack of products, ensuring seamless business continuity and smooth customer experiences.
- Evolving Consumer Preferences: According to a survey by Kearney India and Amazon Pay India, 90% of respondents favour digital payments for online purchases, while nearly 50% extend this preference to brick-and-mortar stores. Furthermore, Indian merchants have adapted, with 69% of their transactions now conducted through digital channels. Consumers today prioritize convenience and speed, driving digital payment modes for in-store purchases.
The Road Ahead:
As per Transactions 2025 – an Economic Times report, India’s payment ecosystem is projected to witness unprecedented growth by 2025, driven by a mix of online and offline solutions, with a likelihood of 30 billion connected POS devices. The country is poised to redefine its payments narrative, ensuring that digital inclusion reaches every corner. Furthermore, advancements in digital infrastructure and increasing smartphone penetration are likely to bolster the adoption of offline payment systems, creating a robust framework for financial inclusion.
The story of India’s payment revolution is incomplete without acknowledging the role of offline payments. As technologies evolve and ecosystems mature, offline payment solutions are not just transforming transactions but also empowering millions of businesses and consumers. The future of offline payments in India is bright, promising a seamless blend of convenience, inclusivity, and innovation—a vision where no one is left behind.
