About 42 pct Indian consumers prefer digital payment: ACI Worldwide report

Digital paymentsDigital payments are the preferred payment option for 42 per cent of consumers in India, according to an online study conducted by YouGov and ACI Worldwide, while 29 per cent consumers prefer card payments, and only 27 per cent still opt for cash payments.

A joint report by Nasdaq-listed ACI Worldwide, a global provider of real-time electronic payment and banking solutions and YouGov, an Internet-based market research and data analytics firm, revealed that growing strength of digital payments in merchant payments channel and increasing ubiquity is being driven by younger consumers.

India government has been actively promoting digital payments and has taken several initiatives for the promotion of a less-cash economy. Digital payments benefit small merchants in several ways, such as lower cost of managing cash, safety and security of money and credit history that opens avenues for more business.

While preference for digital payments – including eWallet and UPI payments – is more pronounced with younger consumers (42 per cent for Gen Z and 48 per cent for millennials), the survey revealed a more consistent picture across age groups in terms of adoption. About 77 per cent of millennials had used digital payments at least once during the festival season, compared to 72 per cent of Gen Z and 69 per cent of Gen X. Nearly half (about 45 per cent) of Baby Boomers also indicated they had used digital payments within the survey period.

“Digital payments, including UPI and other eWallets, are increasingly the payment method of choice across a wide spectrum of consumers in India,” said Kaushik Roy, vice president & country leader – South Asia, ACI Worldwide.

“While there is still a perception that UPI, for example, is primarily for the peer-to-peer channel, this study shows that significant inroads are being made in the merchant payments channel. With monthly transactions on the UPI platform nearing one billion, and credit and debit card usage at the POS experiencing double-digit annual growth, digital and card payments will continue to make inroads into the cash economy,” Roy added.

The survey showed that 44 per cent of respondents used digital payment methods for low-value payment via a merchant website or mobile app. However, 40 per cent of those surveyed said that data privacy was the top area of concern when it came to digital payments. Apart from that internet connectivity, failed transactions, problems processing refunds and fraud are also among the major concerns.

In addition, the respondents said better rewards such as discounts, incentives or cashback and faster and more frictionless checkout, will encourage more frequent use of digital payments.

The fieldwork was undertaken between October 9-15, 2019 with a total sample size of 1,025 Indian adults. The survey was carried out online. Generations were defined as follows – Gen Z (born after 1999, 201 respondents), Millennial (born 1982-1999, 488 respondents), Gen X (born 1965-1981, 279 respondents), and Baby Boomer (born 1946-1964, 57 respondents).

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