Digital payments yet to dethrone cash in priority list of Indians during offline purchases: Survey

Despite the rise among Indians in adopting digital payment methods, cash is still preffered when it comes to offline purchases. About 60% of the ‘aspiring’ class (annual income up to Rs 5 lakh) and 52% of the middle class (Rs 5 lakh to Rs 10 lakh) use cash to make offline transactions, reported ToI quoting a report by Amazon Pay and management consulting firm Kearney.

“For offline purchases, the preference of digital modes of payment increases with higher income levels,” analysts said in the report. Beyond UPI, which has become ubiquitous, the well-heeled also use credit cards and digital wallets. In fact, as transaction size increases, a higher percentage of the consumers in the upper income segments prefer credit cards.

Digital payments rising among rich consumers:
In all, affluent consumers lead the digital payments space using online modes for 80% of transactions. The aspiring segment, though lagging, is fast catching up. The segment uses digital payments for about 67% of the transactions currently, reported ToI quoting the survey.


With smaller cities still under-penetrated in terms of usage of payment modes like credit card—accounting for only 5-6% of transactions in these regions and BNPL, there is potential for higher digital adoption in these towns.

Next wave in small towns
Analysts speculate that the next wave of digital payments growth is expected to come from small towns and cities. Bhopal, Jaipur, Indore and Lucknow are some of the cities that are open to experimenting with new method. When compared to metro cities, these smaller cities are demonstrating faster digital payment adoption. “With digital transactions penetrating even street vendors and smaller towns, we are at an inflection point,” said Vikas Bansal, CEO at Amazon Pay India to ToI.

(with ToI inputs)