scorecardresearch

UPI a big hit with retailers: Neogrowth’s Digital Payments Study

Technology for MSMEs: The FMCG and retail segment witnessed a 14 per cent increase in UPI transactions, followed by Food & Beverage at 12 per cent and Fashion & Lifestyle at 9 per cent which can be attributed to the retailers’ ability to accept digital payments easily and the increased comfort level of their customers in transacting digitally.

msme, msme technology, ease of doing business, digital india, upi, npci, neogrowth, digital finance, digital tech, msme business tech, msme performance report, digital adoption, technology adoption, report, msme index
While usage of UPI is seeing an upward swing, there is a decline in card transactions, by around 12 per cent across all industry segments.

Technology for MSMEs: UPI has emerged as the most preferred mode for consumers to make payments at retail outlets, finds a study by digital lender NeoGrowth. Nearly 70 per cent of the retailers anticipate over 50 per cent of the purchases made at their stores to be conducted through UPI.  

The report ‘Decoding Digital Payments: A Retailer Perspective’ is based on customer data of 3,000-plus retailers along with a survey of 1,000 retailers across India. 

While usage of UPI is seeing an upward swing, there is a decline in card transactions, by around 12 per cent across all industry segments. The downward trajectory can primarily be attributed to the rise in the adoption of contactless payment methods, a trend that gained momentum during the pandemic. The drop is most pronounced in bigger cities like Chennai, which were among the top card users. 

Also read: 55% of MSMEs use mobile hotspots to connect to the internet for daily activities: Report

“MSME Retailers are increasingly recognizing the benefit of using digital payments in their business driven by ease of use and customer convenience. UPI is spearheading the adoption of digital payments among Retailers by ticking all the right boxes,” said Arun Nayyar, Managing Director and CEO, NeoGrowth. 

Interestingly, the uptake of UPI is higher in metros than in smaller cities. Retailers in Bengaluru saw a 14 per cent increase in the share of UPI among their digital transactions, followed by Chennai and Hyderabad at 13 per cent each compared to pre-COVID levels. Smaller cities experienced only a four per cent increase.

Also read: Smaller companies use of tech to digitise tax compliance comparatively lower than larger firms: Survey

The FMCG and retail segment witnessed a 14 per cent increase in UPI transactions, followed by Food & Beverage at 12 per cent and Fashion & Lifestyle at 9 per cent which can be attributed to the retailers’ ability to accept digital payments easily and the increased comfort level of their customers in transacting digitally.

The major impediments in the adoption of digital payments by retailers are failed transactions, followed by the high cost of machinery, and concerns regarding cyber fraud.

The National Payments Corporation of India shows that India crossed 8.8 billion UPI transactions in April 2023. India holds the record for the highest number of online transactions, majorly comprising UPI-based payments. 

Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 16-05-2023 at 17:12 IST