Digital penetration: 65% of transactions done online in small towns

The report said about 90% of respondents favour digital payments for online purchases, while nearly half (50%) extend this preference to brick-and-mortar stores.
Image used for representational purpose.
Image used for representational purpose.Photo | IANS

BENGALURU: Digital payments have penetrated small towns, as 65% of their transactions are digital, compared to 75% in larger cities.

Kearney India and Amazon Pay India on Tuesday released a report on ‘How Urban India Pays’, and it says there is a strong correlation between a city’s average DDPU (Degree of Digital Payment Usage) and its retail potential.

The top six metros (Mumbai and its suburbs, Delhi and NCR, Kolkata, Chennai, Bengaluru, Hyderabad) displayed both high DDPU and high retail potential.

Interestingly, DDPU surpasses retail potential in some cities, such as Lucknow, Patna, Bhopal, Jaipur, Bhubaneswar, Indore, Ahmedabad, and Pune, which have a high DDPU nearly matching that of larger metropolitan cities despite having a lower retail potential than the top six metros.

The report said about 90% of respondents favour digital payments for online purchases, while nearly half (50%) extend this preference to brick-and-mortar stores.

UPI, digital wallets, and cards gain widespread traction as cash transactions dwindle, with digital modes making up 69% of merchant transactions; even street vendors cited receiving 46% of their payments digitally, according to the report.

From online purchases to street vendors selling fruits, flowers and everyday items, digital payments make inroads across sectors, driven by convenience cited as the primary motivator by over 60% of respondents, the report highlighted.

“With digital transactions penetrating even street vendors and smaller towns, we are at an inflection point,” Vikas Bansal, CEO, Amazon Pay India, said. While UPI reigns supreme with 53% of consumers preferring it for online purchases , digital wallets and cards (credit, debit, and prepaid) are preferred by 30% of consumers.

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