Young Indians are taking Prime Minister Narendra Modi’s dream of Digital India forward as more and more millennials prefer digital payments this festive season. However, the reason for it is slightly different than what the PM must have thought. Around 42 percent of the digital payment users said that they prefer it because it offers rewards — discounts, incentives or cashback, while only 24 percent cited faster and more frictionless checkout for their preference, according to a study conducted by YouGov and ACI Worldwide, a leading global provider of real-time electronic payment and banking solutions.
Digital payments are the preferred payment option for 42 percent of consumers in India. This preference is more pronounced with younger consumers. The report says that 77 per cent of millennials had used digital payments at least once during the festival season.
“With monthly transactions on the UPI platform nearing one billion, and credit and debit card usage at the POS experiencing double-digit annual growth, digital and card payments will continue to make inroads into the cash economy,” said Kaushik Roy, Vice President & Country Leader – South Asia, ACI Worldwide.
As much as 32 per cent people have not used cash for festival season purchases, indicating that for some, festival season spending is becoming a largely cashless affair. However, internet connectivity remains a top concern for 44 per cent users, while failed transactions (36 per cent), problems processing refunds (32 per cent) and fraud (29 per cent) were also identified as major concerns.
However, if we wonder what makes UPI apps like Google Pay and Phone Pe give lucrative rewards, the figures quoted in the report give proper reasoning to it. 42 per cent of the users are encouraged by rewards such as discounts, incentives or cashback for more frequent usage of digital payments, while only 24 per cent users choose digital payments for its frictionless usage.
Meanwhile, UPI transactions hit an all-time high of 955.02 million in September 2019 as compared to 918.35 million in August. There has been a 135 percent on-year increase in the number of transactions and UPI is soon expected to cross one billion monthly transactions.
