Study Shows Surge in Digital Payments and Consumer Shifts
A recent study titled "How Urban India Pays" has revealed significant growth and shifting consumer behaviors in India’s digital payment landscape. The report forecasts that India’s retail digital payments will double to $7 trillion by 2030, driven by increasing digital adoption. Key findings include:
- High Adoption Rates: 90% of surveyed respondents prefer digital payments for online purchases, with affluent consumers using digital payment methods for 80% of their transactions. Millennials and Gen X are the primary adopters, with gender parity in usage.
- Growth in Digital Payments: From $300 billion in FY18 to $3.6 trillion in FY24, driven by the Unified Payments Interface (UPI) with a CAGR of 138%.
- Market Penetration: Digital payment penetration is 65% in small towns and 75% in larger cities. The average Degree of Digital Payment Usage (DDPU) correlates with retail potential in cities.
- Emerging Payment Methods: Co-branded credit cards, buy now, pay later (BNPL), wearable payments, and voice assistant-based payments are gaining traction.
- Challenges and Recommendations: Financial fraud, connectivity issues, and trust are concerns for merchants. Growth will come from increasing digital payment penetration among lower-income groups and smaller towns. Key strategies include financial education, targeted programs, improved digital infrastructure, fraud minimization, and expanding credit-based payment methods.
The study underscores the need for concerted efforts from payment providers, the government, and value-added services to foster a more inclusive, secure, and user-friendly digital payment environment in India.
A recent study titled "How Urban India Pays" has revealed significant growth and shifting consumer behaviors in India’s digital payment landscape. The report forecasts that India’s retail digital payments will double to $7 trillion by 2030, driven by increasing digital adoption. Key findings include:
- High Adoption Rates: 90% of surveyed respondents prefer digital payments for online purchases, with affluent consumers using digital payment methods for 80% of their transactions. Millennials and Gen X are the primary adopters, with gender parity in usage.
- Growth in Digital Payments: From $300 billion in FY18 to $3.6 trillion in FY24, driven by the Unified Payments Interface (UPI) with a CAGR of 138%.
- Market Penetration: Digital payment penetration is 65% in small towns and 75% in larger cities. The average Degree of Digital Payment Usage (DDPU) correlates with retail potential in cities.
- Emerging Payment Methods: Co-branded credit cards, buy now, pay later (BNPL), wearable payments, and voice assistant-based payments are gaining traction.
- Challenges and Recommendations: Financial fraud, connectivity issues, and trust are concerns for merchants. Growth will come from increasing digital payment penetration among lower-income groups and smaller towns. Key strategies include financial education, targeted programs, improved digital infrastructure, fraud minimization, and expanding credit-based payment methods.
The study underscores the need for concerted efforts from payment providers, the government, and value-added services to foster a more inclusive, secure, and user-friendly digital payment environment in India.
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