The report states that digital payments continue to be the payment method of choice for festive season spending, with 41% of consumers choosing it as their preferred payment method, comfortably ahead of cash 26% and debit and credit card payments 23%.
Digital payments continue to grow as India’s economy emerges from the worst of the pandemic. According to a new study conducted by YouGov and ACI Worldwide (NASDAQ: ACIW), with 60 per cent of consumers having used digital payments (including eWallets and UPI) multiple times per week for festive season purchases, digital payments in India continue to grow.
Frequent usage (2-3 times per week) has grown from 57 per cent last year, while only 6 per cent of respondents have no intention of using digital payments this festive season, dropping from 9 per cent a year ago.
The latest research by ACI and YouGov states that digital payments continue to be the payment method of choice for festive season spending, with 41 per cent of consumers choosing it as their preferred payment method, comfortably ahead of cash (26 per cent) and debit and credit card payments (23 per cent). The report further states that concerns over digital payments fraud have decreased, with 24 per cent identifying it as a concern compared to 30 per cent last year. Experts say in line with this trend, digital payments are considered the most secure way to pay for 33 per cent of respondents, up from 24 per cent in 2020, and just behind cash-on-delivery (35 per cent).
According to the latest data from NPCI, breaking all previous records both in transaction volume and value, UPI generated 3.65 billion transactions worth Rs 6.54 trillion in September. Going from 1.8 billion transactions worth Rs. 3.29 trillion monthly, the monthly transactions on the UPI platform have doubled since a year ago.
Ankur Saxena, country leader, South Asia, ACI Worldwide says “It is encouraging to see the heightened trust in digital payments by Indian consumers, which is also corroborated by the month-on-month growth in transaction volumes, increased frequency of usage among consumers and use of digital payments for higher-value payments. This reinforces the fact that digital payments are becoming an even more integral part of our daily lives, as India continues to shine as a global leader in real-time, digital payments.”
70 per cent of respondents said that with the greater dependence on online shopping that developed during pandemic-related restrictions, they now prefer online to in-store shopping. However, 60 per cent also said they look forward to in-person shopping if adequate precautions – including social distancing – are in place.
Saxena further adds, “While our research suggests that consumers will continue to seek the convenience of online shopping, they’re also looking forward to complementing it with in-store shopping experiences as pandemic restrictions ease. This highlights how merchants and payment providers will have to account for many different customer journeys, which cross over traditional channels. Omni-channel payments will emerge as a major focus for retailers.”
Key findings and trends from the report:
- Digital payments were the preferred payment method for 41 per cent of respondents overall, rising to 50 per cent in the 25-34 age group. The over-45 age group continued to divide their payment preferences between card payments and digital payments almost equally (35 per cent and 33 per cent, respectively).
- Roughly one-fifth (19 per cent) used digital payments for purchases of Rs 10,000 to Rs 50,000 this festive season, in line with 21 per cent last year. Only 4 per cent made purchases exceeding Rs. 50,000, the same as last year.
- The report states 57 per cent continue to use digital payments for groceries and essentials, which remains the most common category for digital payment purchases. Nearly half of those surveyed used digital payments for apparel (48 per cent) and electronics (47 per cent), with other popular categories including household appliances (43 per cent) and homewares (41 per cent).
- While concerns have dropped across the board, failed transactions continue to remain a top concern for 41 per cent of respondents, followed by data privacy (34 per cent) and poor internet connectivity (30 per cent). 14 per cent have no concerns with digital payments whatsoever.
- 69 per cent feel digital payments offer greater financial transparency (better insights into how, when and what money is spent on) compared to other payment methods. Similarly, 69 per cent think digital payments offer better promotions, incentives, or cashback than other payment methods.