A recent report has said that with digital adoption fast gaining currency, India is likely to see retail digital payments double to $ 7 trillion by 2030 from the current levels.
The study by Kearney and Amazon Pay said that strong adoption of digital payments in online purchases has potentially led to a permanent shift in consumer behaviours, fueling offline adoption as well.
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In the report titled ‘How Urban India Pays’, Kearney-Amazon Pay said while 90 per cent of the respondents of the survey preferred digital payments when making online purchases, affluent consumers lead the way with the highest Degree of Digital Payment Usage (DDPU), tending to use various modes of digital payment for 80 per cent of their transactions.
The research was based on an online survey of over 6,000 consumers along with more than 1,000 merchants through offline and online methods across 120 cities with representation from various regions, income groups, city categories, age brackets and genders.
“Millennials and Gen X are leading in the adoption of all types of digital payment instruments,” it said. “Men and women both use digital payments in about 72 per cent of their transactions, indicating gender parity.
India has seen a surge in e-commerce, with the market valued at $ 75 billion to $ 80 billion in 2022 and expected to grow at a 21 per cent czGR until 2030.
“In line with India’s digital journey, retail digital payments have grown dramatically over the past five years – from $ 300 billion in FY18 to $ 3.6 trillion in FY24. By FY30, they are likely to double to $ 7 trillion,” the report said.
“With such dynamic developments, it is no wonder that India is a global frontrunner in the digital payment landscape, accounting for a stellar 46 per cent of the global digital transaction volumes in 2022,” it added.
The report further highlighted that the digital payments have penetrated small towns, with respondents in these areas highlighting that 65% of their transactions are digital, while respondents in larger cities cited this ratio to be 75%.
“There is a strong correlation between a city’s average DDPU and its retail potential, as measured by the Kearney India Retail Index, with the top six metros displaying both high DDPU and high retail potential,” the report said.
