Festive Season Spending: 85 Percent of Indian Consumers See Merchant Acceptance & Ease of Use of Digital Payments Increasing,...
November 11 2020 - 12:30AM
Business Wire
Indian shoppers are using digital payment
methods — including UPI and eWallets — more frequently this holiday
season, but failed transactions emerge as a major concern
Digital payments continue to be the preferred payment method for
39 percent of consumers in India, ahead of debit and credit card
payments (26%) and cash (26%), according to a new study conducted
during the festive season by YouGov and ACI Worldwide (NASDAQ:
ACIW), a leading global provider of real-time digital payment
software and solutions.
Digital payments, including eWallets and UPI payments, were used
by 57 percent of respondents more than twice per week for festive
season purchases, up from 43 percent a year ago. Increased digital
payment volumes are also being driven by “power users,” with one in
three (29%) using digital payments at least once per day, up from
15 percent last year.
“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,” said Kaushik Roy, vice president &
country leader – South Asia, ACI Worldwide. “The pandemic has
driven increased usage of ‘touchless’ digital payments — including
UPI, which already recorded two billion monthly transactions in
October — and contactless cards, which in an offline environment
support the hygiene and safety measures being encouraged by the
authorities.”
UPI generated record monthly transactions in October for the
seventh consecutive month, with 2.07 billion transactions totaling
more than Rs 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.
“While there is overwhelming consensus that ease of use of
digital payments is increasing, and merchant acceptance has
improved since a year ago, some consumer concerns highlight the
challenges that lie ahead for banks and payment providers,”
continued Roy. “Forty-four percent cite failed transactions as a
top concern when it comes to digital payments. Continued successful
growth of digital payment volumes — and consumer confidence — will
require providers of digital payments infrastructure to ensure they
are operating stable, high-capacity systems.”
Other key findings and trends:
Payment behaviors and spending patterns
- Digital payments were the preferred payment method for 39
percent of respondents overall, rising to 47 percent in the 25-34
age group. The over-45 age group preferred card payments and
digital payments almost equally (33% and 34%, respectively).
- Only nine percent avoid digital payments completely during
festive season, marginally less than a year ago (10%).
- One fifth (21%) used digital payments for purchases Rs.
10-50,000 (USD $135-675) this festive season. Only 4 percent made
purchases exceeding Rs. 50,000 ($675).
- Two thirds (63%) 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%).
Consumer concerns and industry opportunities for digital
payments
- Failed transactions are a top concern for 44 percent of
respondents, up from 36 percent 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%).
- 37 percent cite data privacy as a top concern (40% last year),
while 13 percent have no concerns whatsoever.
- The most common fraud-related concern is fake apps or websites
that are part of a scam, cited by 42 percent. Forty percent also
have concerns around fraudulent KYC (Know Your Customer) updates
and fake UPI payment links.
- Although digital payments are the preferred payment method, 45
percent consider cash and payment on delivery as the most secure,
ahead of digital (24%), cards (20%) and internet banking
(11%).
- Eighty-five percent believe that it is easier to use digital
payments when making purchases in-store or at merchant locations
compared to last festive season.
- Ninety percent believe authorities should continue to encourage
digital payments adoption to maintain hygiene, safety and social
distancing measures during the pandemic.
- More than 80 percent feel digital payments offer greater
financial transparency (better insights into how, when and what
money is spent on) compared to other payment methods. Similarly, 84
percent think digital payments offer better promotions, incentives
or cashbacks than other payment methods.
- One third (35%) are now more inclined to use contactless
digital payments because of guidance from authorities, slightly up
from April 2020 (32% in April 2020).
- Twenty-two percent are now exercising greater caution when
using digital payments during the pandemic, compared to 28 percent
who took more caution in April 2020.
Survey Methodology:
All figures, unless otherwise stated, are from YouGov Plc. Total
sample size was 1,008 adults. Fieldwork was undertaken November
3-5, 2020. 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.
About ACI Worldwide
ACI Worldwide powers digital payments for more than 6,000
organizations around the world. More than 1,000 of the largest
financial institutions and intermediaries, as well as thousands of
global merchants, rely on ACI to execute $14 trillion each day in
payments and securities. In addition, myriad organizations utilize
our bill presentment and payment services. Through our
comprehensive suite of software solutions delivered on customers’
premises, through the public cloud or through ACI’s private cloud,
we provide real-time payment capabilities and enable the industry’s
most complete omni-channel payments experience.
© Copyright ACI Worldwide, Inc. 2020
ACI, ACI Worldwide, ACI Payments, Inc., ACI Pay, Speedpay and
all ACI product/solution names are trademarks or registered
trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in
the United States, other countries or both. Other parties’
trademarks referenced are the property of their respective
owners.
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PR Contacts
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