Surge in digital payments for online purchases led to a permanent shift in the behaviour of consumers
The surge in digital payments for online purchases has led to a permanent shift in the behaviour of consumers, a report by Kearney observed in its report titled, " How Urban India Pays" adding that even it is influencing offline transactions as well.
According to the observations made by the report, a significant 90 per cent said that they prefer digital payments for online shoping. Similarly, about 50 consumers were found using online payment mathods during their offline purchases.
More than 85 per cent of the respondent indicated a strong preference for digital payments for discretionary spending, such as for electronics, clothes, and footwear, as per the report.
It further added that millennials and Gen X are at the forefront of adopting digital payment instruments, though Boomers also exhibit significant usage, particularly with cards and digital wallets.
Notably, both men and women utilise digital payments in about 72 per cent of their transactions, underscoring gender parity in digital payment adoption, as per the report.
About 60 per cent people participated in the survey highlighted convenience as the primary reason behind their choice of digital payments.
Additionally, consumers are also influenced by the rewards or incentives for digital payments, with 49 per cent of consumers choosing it for online purchases and 34 per cent for offline transactions, as per the report.
Digital payments have penetrated small towns, with respondents in these areas highlighting that 65 per cent of their transactions are digital, while respondents in larger cities cited this ratio to be 75 per cent, it added.
Interestingly, some cities like Lucknow, Patna, Bhopal, Jaipur, Bhubaneswar, Indore, Ahmedabad, and Pune shows a high Degree of Digital Payment Usage (DDPU) comparable to metro cities, despite having lower retail potential, as report highlighted.
The use of co-branded credit cards are also gaining popularity in the country, as per the report. It further highlights that buy now, pay later (BNPL), wearable payments, and voice-assisted payments are making significant strides with 87 per cent awareness among respondents and 34 per cent having already used it.
The digital modes constitute approximately 69 per cent of total transaction volumes for merchants, as per the report.
Highlighting the widespead adoption, the report observed that even street vendors, including paan shops, fruit and flower sellers, food stalls, and Kirana stores, are swiftly adopting digital payments, receiving an average of 46 per cent of their payments digitally.
The survey also underscores the challenges of both consumers and merchants. It adds that both are facing similar challenges, including financial fraud, connectivity issues, and building trust in digital transactions.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)