People in urban India now prefer to use more digital payments as compared to cash transactions for their day-to-day spendings. According to a survey by Kearney India and Amazon Pay India titled “How Urban India Pays”, over 6,000 consumers and 1,000 merchants, revealed a seismic shift in payment preferences. Per the report, 90 per cent of respondents favour digital payments for online purchases while nearly 50 per cent extend this preference to brick-and-mortar stores. Further, it added that Indian merchants have too adapted with a substantial 69 per cent of their transactions now conducted through digital channels.
The survey spanned 120 cities and over 6,000 consumers and 1,000 merchants to reveal the trends. It covered diverse regions, income groups, city tiers, age segments and genders.
“India’s digital payment revolution is firing on all cylinders, propelled by consumers and merchants alike,” said Vikas Bansal, CEO, Amazon Pay India. “With digital transactions penetrating even street vendors and smaller towns, we are at an inflection point,” he added. Per the findings of the survey, consumers in small towns highlighted that 65 per cent of their payment transactions are digital while consumers in larger cities cited this ratio to be approximately 75 per cent.
Shashwat Sharma, Partner, Financial Services Lead, Kearney India, said, “Our comprehensive research offers a captivating glimpse into India’s digital payment evolution, showing a dramatic shift in consumer and merchant behaviors. From the widespread adoption of digital payments in both online and offline transactions to the rise of emerging payment methods like BNPL, this report provides a detailed look at how India is transforming its payment landscape. We are hoping that this report serves as a valuable resource for stakeholders to navigate and contribute to the dynamic and inclusive digital payment ecosystem in India.”
The report stated that the digital payment revolution is being spearheaded by India’s millennials (aged 25-43 years) and Gen X (aged 44–59 years). However, it added, the movement transcends age barriers, as even Boomers (60 years and above) are rapidly embracing cards and digital wallets. In terms of gender parity, the report said, both men and women are leveraging digital payments in over 70 per cent of transactions. What acts as the primary motivator for adoption of digital payments for online and offline purchases alike is the unparalleled convenience it offers, as cited by over 60 per cent respondents. Speed, efficiency, and lucrative rewards further amplify the appeal, catalyzing widespread adoption.
In terms of modes of digital payment, the report said that UPI reigns supreme with 53 per cent of consumers preferring it for online purchases. Digital wallets and cards (debut, credit and prepaid) are preferred by 30 per cent of consumers. Now in offline purchases, cash is still predominant with 25 per cent of consumers preferring UPI and 20 per cent inclined towards digital wallets and cards.
From: financialexpress
Financial News