A majority of consumers in India are leveraging digital payments more frequently during the festive season, according to a new study conducted by YouGov and ACI Worldwide.
As per the report, frequent usage (2-3 times per week) of digital payments has increased from 57 per cent last year, while 6 per cent of respondents have no intention of using digital payments this festive season, declining from 9 per cent a year ago.
The research highlighted that digital payments continued to be the payment method of choice for festive season spending, with 60 per cent of consumers having used digital payments (including eWallets and UPI) multiple times per week for festive season purchases.
41 per cent of consumers chose digital payments as their preferred payment method, ahead of cash (26 per cent) and debit and credit card payments (23 per cent).
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 were divided in terms of their their payment preferences between card payments and digital payments almost equally (35 per cent and 33 per cent, respectively).
19 per cent of respondents used digital payments for purchases of ₹10,000 to ₹50,000 this festive season, in line with 21 per cent last year. Only 4 per cent made purchases exceeding ₹50,000, the same as last year.
57 per cent of respondents said that they 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 related to digital payments have dropped across the board, failed transactions continued 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 of respondents had no concerns with digital payments whatsoever.
It also highlighted the advantages of such payments as seen by respondents. 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 cashbacks than other payment methods.
Concerns over digital payments fraud have decreased, with 24 per cent identifying it as a concern compared to 30 per cent last year. 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).
“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,” said Ankur Saxena, country leader, South Asia, ACI Worldwide.
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, the report further added. However, 60 per cent also said they look forward to in-person shopping if adequate precautions – including social distancing – are in place.
“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,” continued Saxena.
“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,” he added.
