A huge revolution is waiting to happen in the Indian financial market!

The electronic and digital segments of the financial markets have the potential to grow and expand in India, especially the cash-management system via ATM-debit card usage.

The potential of ATM-debit card transactions is big in the cash-driven Indian economy comprising of some 58 million small and medium enterprises (SMEs), merchants and traders, said Ari Sarker, co-president for Asia Pacific at MasterCard.

He estimated that more than 520 million debit card users have been withdrawing an average of $370 billion cash from a 190,000 ATM network in one year.

Moreover, the fact that India is 95% cash driven economy is a good sign and could boost more competition in the digital sector of the financial market, Sarker said regarding the current cash-based dealings among most of the SMEs, merchants and traders, who are members of the Confederation of All India Traders (CAIT).

Moreover, a competitive environment would produce innovative products and services, especially in line with the government’s initiatives which aggressively promote mobile banking among others.

Presently, the Rupay Card of the National Payments Corp of India (NPCI) dominates the debit card market. But Sarker is of the view that the Indian market is ready for more players.

“The greatest service the country can do is to encourage many players to play in this industry, because the more people you allow to play, the better are the products, services and level of competition,” he said.

The ATM volume makes up 87% of the entire market flow with the rest 13% done through e-commerce and point of sale.

Going forward, SMEs, traders and merchants would have to increase the use of electronic banking transactions which would eventually support credit worthiness of their business among financial institutions.

Looking forward to an open competition, Sarker reaffirmed MasterCard’s presence in India with expansion plans.

In May this year, MasterCard and CAIT launched a joint initiative to promote the digitization of payments among Indian traders, through knowledge sharing and training sessions across the country, in line with the government’s ‘Digital India’ vision.