Indian consumers prefer to use digital payments, ACI Worldwide and YouGov reveal

According to the press release, digital payments in India are ahead of debit and credit card payments (26%) and cash (26%), while 85% of Indian consumers see merchant acceptance and ease of use of digital payments increasing. Besides, UPI generated record monthly transactions in October 2020 for the seventh consecutive month, with 2.07 billion transactions. 

Overall, transactions on the platform have increased nearly two-fold in the past year, with monthly transactions having crossed one billion for the first time in October 2019. Other key findings and trends from the research:

• Digital payments were the preferred payment method for 39% of respondents overall, rising to 47% in the 25-34 age group. The over-45 age group preferred card payments and digital payments almost equally (33% and 34%, respectively).

• Only 9% avoid digital payments completely during festive season, marginally less than a year ago (10%).

• One fifth (21%) used digital payments for purchases between USD 135-675 this festive season. Only 4% made purchases exceeding USD 675.

• 63% of consumers are using digital payments for groceries and essentials during the festive season. Nearly half of those surveyed used digital payments for electronics, including mobile (48%) and fashion purchases (47%).

• Failed transactions are a top concern for 44% of respondents, up from 36% last year. 

• Fewer consumers are concerned about internet connectivity for completing digital transactions compared to last year (32% down from 44%), and fewer are concerned about merchant acceptance infrastructure (15% down from 23%).

• The most common fraud-related concern is fake apps or websites that are part of a scam, cited by 42%, while 40% also have concerns around fraudulent KYC updates and fake UPI payment links.

• Although digital payments are the preferred payment method, 45% consider cash and payment on delivery as the most secure, ahead of digital (24%), cards (20%) and internet banking (11%).

• 84% of the respondents believe that it is easier to use digital payments when making purchases in-store or at merchant locations compared to last festive season.

• More than 80% feel that digital payments offer greater financial transparency (better insights into how, when and what money is spent on) compared to other payment methods. Similarly, 84% consumers think digital payments offer better promotions, incentives, or cashbacks than other payment methods.