India B2B Payments Market Size Likely to Surpass At a CAGR of 8.1% By 2033

As per the current market research conducted by the CMI Team, the India B2B Payments Market size is expected to record a CAGR of 8.1% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 563.6 Billion. By 2033, the valuation is anticipated to reach USD 1,136.1 Billion.

India B2B Payments Market: Growth Factors and Dynamics

• Fintech Innovation: The rise of fintech startups in India is driving innovation in B2B payments, with companies offering advanced payment solutions, such as mobile wallets, UPI-based payments, and digital invoicing platforms, catering to the diverse needs of businesses.

• Digital Transformation: India’s B2B payments market is undergoing significant digital transformation, fueled by government initiatives like Digital India and demonetization, which promote cashless transactions and digital payments adoption among businesses.

• E-commerce Growth: The rapid expansion of e-commerce in India is driving demand for efficient B2B payment solutions that support online transactions, supply chain financing, and seamless integration with e-commerce platforms, fostering market growth.

• Government Regulations: Regulatory developments like the Goods and Services Tax (GST) regime and the Unified Payments Interface (UPI) framework are shaping the B2B payments landscape in India, promoting transparency, efficiency, and interoperability in payment systems.

• SME Digitization: Small and medium-sized enterprises (SMEs) in India are increasingly embracing digital payments to streamline operations, improve cash flow management, and access financing options, driving adoption of B2B payment solutions tailored for the SME segment.

• Cross-Border Trade: India’s growing participation in global trade is driving demand for cross-border B2B payment solutions that offer competitive exchange rates, low transaction fees, and compliance with international regulations, facilitating smoother international transactions for Indian businesses.

• Mobile Penetration and Smartphone Adoption: The widespread availability of affordable smartphones and the increasing penetration of mobile internet in India are driving the adoption of mobile-based B2B payment solutions. Businesses are leveraging mobile apps and USSD-based payment systems to initiate and manage B2B transactions conveniently.

• Shift from Cash to Digital Payments: India’s efforts to reduce cash dependency through initiatives like demonetization and the promotion of digital payments are accelerating the transition from cash-based to digital B2B payments. This shift is fostering a culture of transparency, accountability, and efficiency in business transactions.

• Integration of AI and Automation: The integration of artificial intelligence (AI) and automation technologies into B2B payment processes is streamlining operations, reducing manual errors, and enhancing decision-making capabilities. Indian businesses are increasingly adopting AI-powered payment solutions for tasks like fraud detection, invoice processing, and cash flow forecasting, driving efficiency and accuracy in B2B transactions.

India B2B Payments Market: Partnership and Acquisitions

• In 2024, Paytm’s collaboration with prominent banks aligns with its goal of becoming the largest financial distribution platform. This partnership may enable Paytm to expand its service offerings, potentially boosting revenue through profit sharing with these financial institutions.

• In 2024, PhonePe has collaborated with Sri Lankan ride-hailing company PickMe to provide UPI payments for Indian users. This partnership enhances PhonePe’s global footprint, allowing Indian travelers to conveniently make online payments for rides in Sri Lanka, catering to the increasing number of Indian tourists visiting the country.

Report Scope

India B2B Payments Market: COVID-19 Analysis

The COVID-19 pandemic has significantly impacted the India B2B Payments Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

• Acceleration of Digital Adoption: The COVID-19 pandemic has accelerated the adoption of digital payment solutions in the India B2B payments market. Businesses, prompted by social distancing measures and remote working arrangements, increasingly relied on online payment platforms, UPI, and mobile wallets to facilitate B2B transactions.

• Cash Flow Challenges: The economic disruptions caused by the pandemic led to cash flow challenges for many businesses in India, impacting their ability to make timely payments. This resulted in a heightened focus on liquidity management and working capital optimization in the B2B payments space.

• Government Stimulus and Support: The Indian government implemented various stimulus measures and relief packages to support businesses during the pandemic. These initiatives included financial assistance programs, tax relief, and credit guarantees aimed at bolstering liquidity and facilitating recovery in the B2B payments market.

• Expansion of Digital Infrastructure: The pandemic highlighted the importance of robust digital infrastructure for facilitating remote transactions and business continuity. Investments in digital payment infrastructure, such as the expansion of UPI and the development of digital invoicing platforms, are key to enabling seamless B2B payments and supporting economic recovery.

• Focus on Supply Chain Resilience: Businesses are reevaluating their supply chain strategies and adopting measures to enhance resilience in the face of future disruptions. This includes diversifying supplier networks, implementing risk mitigation strategies, and leveraging technology to improve visibility and transparency across the supply chain, thereby strengthening the foundation for B2B payments.

• Emphasis on Payment Security: With the shift towards digital payments, there is a heightened emphasis on payment security and fraud prevention measures. Businesses are investing in technologies such as blockchain, encryption, and biometric authentication to enhance the security of B2B transactions and build trust among stakeholders.

• Adoption of Flexible Payment Terms: To support recovery and accommodate businesses facing financial constraints, there is a trend towards offering flexible payment terms and financing options in the B2B payments market. This includes extended payment terms, installment-based payments, and dynamic discounting arrangements to ease cash flow pressures and facilitate smoother transactions.

In conclusion, the COVID-19 pandemic has had a mixed impact on the India B2B Payments Market, with some challenges and opportunities arising from the pandemic.

List of the prominent players in the India B2B Payments Market:

• Razorpay
• Paytm Payments Bank Limited
• BillDesk
• HDFC Bank
• ICICI Bank
• State Bank of India (SBI)
• Axis Bank
• PayPal India Private Limited
• PayU India
• Citibank India
• Yes Bank
• PhonePe
• Bharat Bill Payment System (BBPS)
• Cashfree Payments India Private Limited
• CCAvenue (Avenues India Pvt. Ltd.)
• Others

The India B2B Payments Market is segmented as follows:

By Payment Method

• Electronic Funds Transfer (EFT)
• Credit/Debit Cards
• Automated Clearing House (ACH) Transfers
• Wire Transfers
• Checks
• Virtual Cards
• Others

By Application

• Retail
• Manufacturing
• Healthcare
• IT & Telecommunications
• Automotive
• Construction
• Energy & Utilities
• Others

By Service Provider

• Banks
• Payment Processors
• FinTech Companies
• Payment Gateways
• Software Providers

By End User

• Small and Medium Enterprises (SMEs)
• Large Enterprises