Consumers in India have said better rewards would encourage more frequent usage of digital payments, according to a new online study conducted by YouGov and ACI Worldwide.
Forty-two percent of respondents cited rewards such as discounts, incentives or cashbacks to be a big driver for increasing their use of digital payments, alongside faster and more frictionless checkout (24%).
The study surveyed 1,025 adults in India, looking at purchases taking place during the festive season, and it found that 77% of millennials had used digital payments at least once, compared to 72% of Gen Z and 69% of Gen X. Nearly half (45%) of baby boomers also indicated they had used digital payments over the same period.
Other key findings and trends:
• 43% of respondents used digital payment methods regularly (at least 2-3 times per week) during the festival period, with 15% purchasing this way once or more per day.
• 32% have not used cash for festival season purchases, indicating that for some, festival season spending is becoming a largely cashless affair.
• 10% claimed to have not made a digital payment method at all in the period leading up to Diwali.
• Peer-to-peer (P2P) payments were made by 36% of respondents for low-value payments (less than 1,000 INR) and 37% for high-value payments (more than 1,000 INR) during the festival season.
While preference for digital payments – including e-wallet and UPI payments – was more pronounced among younger consumers (42% for Gen Z and 48% for millennials), the survey revealed a more consistent picture across age groups in terms of adoption.
Kaushik Roy, vice president & country leader South Asia at ACI Worldwide, said digital payments, including UPI and other e-wallets, are increasingly the payment method of choice across a wide spectrum of consumers in India.
“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,” he added.
The study noted that the use of digital payment methods for low-value payment (less than 1,000 INR) via a merchant website (e-commerce) or app (P2M) by 44% of respondents is indicative of the progress made by digital payments in the merchant channel.
However, banks, fintechs and merchants should be aware that 40% of those surveyed consider data privacy as a top area of concern when it comes to digital payments.
Elsewhere, internet connectivity was a top concern for 44% of respondents, while failed transactions (36%), problems processing refunds (32%) and fraud (29%) were also identified as major concerns.
Sourced from ACI Worldwide