In a remarkable shift towards digital commerce, non-cash payments in India’s e-commerce sector have surged to 58.1% in 2023, up from just 20.4% six years ago. This dramatic growth reflects the increasing adoption of UPI, debit/credit cards, wallets, and BNPL (Buy Now Pay Later) options by online shoppers.
This upward trend is powered by India’s robust fintech ecosystem, affordable smartphones, affordable data plans, and government efforts like Digital India.
What’s Driving the Shift?
- UPI (Unified Payments Interface): Easy, instant, and secure – UPI has become the go-to payment method for many Indians.
- Buy Now, Pay Later (BNPL): Millennials and Gen Z love the flexibility of paying later.
- Card Payments: Credit and debit cards remain strong for big-ticket purchases.
- E-wallets: Apps like PhonePe and Paytm continue to be popular for daily transactions.
The e-commerce revolution in Tier 2 and Tier 3 cities has also accelerated this change. More Indians are now comfortable buying online, and many prefer digital payment methods over cash.
The report also mentions that cash-on-delivery (COD), once dominant in Indian e-commerce, has steadily declined and now accounts for just 41.9% of total payments. Customers prefer the convenience, speed, and safety of digital payments.
Key Sectors Leading the Charge:
- Fashion
- Electronics
- Grocery
- Healthcare & Wellness
These sectors see the highest digital payment adoption, especially during festive sales and seasonal offers.
India’s digital commerce is now on par with some of the world’s leading economies in terms of cashless payment penetration, driven by innovation, trust, and convenience.
