Digital payments continue to be the preferred payment method for 39 per cent of consumers in India, ahead of debit and credit card payments (26 per cent) and cash (26 per cent).

According to a new study conducted during the festival season by YouGov and ACI Worldwide, revealed that digital payments, including eWallets and UPI payments, were used by 57 per cent of respondents more than twice per week for festival season purchases. This is up from 43 per cent a year ago.

Increased digital payment volumes are also being driven by “power users,” with one in three (29 per cent) using digital payments at least once per day, up from 15 per cent last year.

Kaushik Roy, Vice-President & country leader – South Asia, ACI Worldwide, said: “It is clear from this year’s data that digital payments are becoming more entrenched in the everyday lives of consumers, and for many, these convenient and secure payment types are undoubtedly the preferred choice.”

He added: “The pandemic has driven increased usage of “touchless” digital payments — including UPI which already recorded a record two billion monthly transactions in October — and contactless cards, which in an offline environment support the hygiene and safety measures encouraged by the authorities.”

UPI clocked record monthly transactions in October for the seventh consecutive month, with 2.07 billion transactions totalling more than ₹3.86 lakh crore in value.

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.

The survey noted that only nine percent avoid digital payments completely during the festival season, marginally less than a year ago (10 per cent).

One fifth of respondents (21 per cent) used digital payments for purchases in the range of ₹10-50,000 this festival season. Only 4 per cent made purchases exceeding ₹50,000.

Two-thirds (63 per cent) are using digital payments for groceries and essentials during the festival season. Nearly half of those surveyed used digital payments for electronics, including mobile (48 per cent) and fashion purchases (47 per cent).

90 per cent believe authorities should continue to encourage digital payment adoption as a way to maintain hygiene, safety and social distancing measures during the pandemic.

More than 80 per cent feel digital payments offer greater financial transparency, compared to other payment methods. Similarly, 84 per cent think digital payments offer better promotions, incentives or cashback than other payment methods.

Digital transactions concerns

Consumers also raised concerns over the digital payment system. Failed transactions are a top concern for 44 per cent of respondents, up from 36 per cent last year.

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

While 37 per cent cite data privacy as a top concern (40 per cent last year), 13 per cent of respondents have no concerns whatsoever.

The most common fraud-related concern is fake apps or websites that are part of a scam, cited by 42 per cent of respondents.

Survey Methodology

The total sample size of the survey was 1,008 adults. The survey was carried out online. The figures have been weighted and are representative of all Indian adults (aged 18+) in the following Tier 1 metro areas: Mumbai, Delhi NCR, Chennai, Kolkata, Bangalore, Hyderabad.

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