Market Overview

While cards are currently the most popular way to pay for goods online, bank transfers and digital wallets are becoming more popular methods of payment in India.


India’s indigenous payment network RuPay has cornered a significant market share in the domestic card market since its launch in 2012. As of November 30, 2020, RuPay’s market share has increased to more than 60 percent of total cards issued, from merely a 17-percent market share in 2017.

Also, in December 2021 the Indian government approved a $170 million plan to compensate a percentage of the transactions processed on RuPay cards and low-value interbank transactions for a year to increase accessibility for the republic's unbanked and marginalized low-earning citizens. This would also serve to increase transaction processing volume and deepen market penetration that Indian banks can secure long-term transaction processing revenue streams from.

The government has been promoting RuPay’s usage since long in a bit to give a boost to the domestic card network and has also equated the usage of RuPay to nationalism and supporting the nation. Additionally, operating costs are lower for banks while using RuPay versus global networks. Banks issuing MasterCard and Visa cards, which have been serving the premium segment, pay a quarterly fee to be on their network. But with RuPay being a domestic network, banks do not have to pay this fee leading to no processing or transaction fees being passed on to customers.

The Reserve Bank of India (RBI) in a notification barred MasterCard from issuing new cards with effect from July 22, 2021 – a plus for both RuPay and mainly Visa. MasterCard was found to be non-compliant with the RBI’s directions on Storage of Payment System Data which directed system providers to ensure that all data related to payment systems must be stored only in India. The move forced various banks to move to RuPay and Visa cards.

While RuPay has a large share of the debit market, it lags in the credit card space. As per sources, currently, RuPay only has a 20 percent share of India’s credit card market which Visa, followed by MasterCard lead. While RuPay’s adoption is slowly picking pace in credit too, Visa and MasterCard are expected to remain the preferred choice for banks as credit cards are a key revenue earner for banks. Meanwhile, RuPay plans to grow its credit card business and is also working on growing its contactless payments offerings which allow making payments through smartphones and watches. To summarize, India’s credit market is highly underpenetrated. It is expected to grow by 3x in the next few years and that means all players can get a fair share of the market based on their offerings. This will also help in making accessible digital modes of payments to unbanked and marginalized populations.

Payment Methods

Debit/Credit cards, PayPal, PayTm, PayUMoney, Pockets, Apple Pay, Google Pay, Samsung Pay, Skrill, Cheque, Payoneer, Mobikwik, PayZap, Cashfree, Instamojo.

1. Debit/Credit Cards

Some e-commerce platforms offer their customers shopping points or discounts if they shop with debit/credit cards. That has made debit cards a popular mode of payment.

Cards are currently the most-used payment method for online shopping in India, representing 29 percent of transactions, or $10.6 billion in sales. This is despite the fact that on a national scale card penetration is low, at 0.64 per capita for debit cards and 0.02 for credit cards. This suggests that cards have the opportunity to take an even larger share as the use of cash declines. 

2. PayTm

Another fast-growing payment method in India is digital wallets, which are currently used for a quarter of all e-commerce payments. There is a plethora of digital wallet options available in India already, with the most popular including Airtel Money and PayPal.

PayTm is a mobile-based wallet payment method through which consumers can receive and send payments all across India. Consumers are also able to do shopping through it and pay utility bills etc.

PayTm supports the foreign currency of over 72 currencies and international debit/credit cards like MasterCard and Visa. It charges reduced transaction fees for SMEs and zero transactions for startup businesses. It also supports e-Commerce merchants such as ViArt, and Ubercart. 

3. PayUMoney

PayUMoney is among the leading payment methods adopted in India. Through PayUmoney, individuals and businesses can send and receive payments all across India. Through this, even unregistered businesses can do safe transactions.

PayUMoney supports integration with payment methods such as e-wallets, internet banking, and Unified Payment Interface (UPI).  Its other features include invoice generating, 24/7 online customer support, and recurring billing.

4. Pockets

Pocket is a wallet-based system powered by Visa through which users can send and receive payments all across India. Users can also recharge mobiles, do online shopping and pay utility bills, etc.

Pockets let users schedule payments, and set recurring or automatic funds transfers from their bank accounts to Pockets.

5. Skrill

Skrill is formerly known as Moneybookers is an e-commerce solution is allowing its users for making payments. Users can transfer international payments with the lowest cost and best rates when a change of currency is involved. This payment method is mostly used by freelancers to receive their international payments.

With its cryptocurrency feature, Skrill allows users to accept payments in cryptocurrencies.

6. Mobikwik

Mobikwik is an Indian online payment company allowing users to receive and transfer payments. It is a digital wallet-based system. Consumers must have money in wallet to use it for making payments.

It is a user-friendly mode of payment for bills such as insurance and utilities. It supports both international and domestic debit and credit cards. Its One Time Password (OTP) feature makes it a secure mode of payment.

7. PayZap

PayZap is an online solution allowing users to make payments with a mere click. Users need to register on the website and then necessary payments can be made.

Users are rewarded with cash-backs, loyalty points, sign-on rewards, etc. It currently supports Visa and Mastercard credit/debit cards.

8. Cashfree

Cashfree uses a tool called “cashgram” to generate payment links. They are linked to the app user’s account. Businesses can then send those links to customers, and the customers can use them to make payments to those businesses. Its features include instant refunds, bulky payment, bank details verification, and recurring payments. 

9. Instamojo

Instamojo is a payment app known for its user-friendliness and flexibility. It is mostly used to make online payments for products such as videos, and music. It enables businesses to receive payments from customers on platforms such as Instagram, WhatsApp, and Facebook.

Its users can also receive payments through email and SMS. Some of the e-commerce merchants that accept Instamojo payments include Opencart, Magento, Zepo, and Springboard.