Retail Payment Behaviour In India

Recently, RBI concluded a survey on Retail Payment Habits of India. They did that survey in 6 cities- Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Guwahati. As one can see, except Guwahati all these cities are Tier-1 cities, hence the findings should be taken as a reflection of what happens across the country. However, it provides interesting insights into the payment behaviour of the country.

RBI India

· The reason I was looking at this report was to figure out what the status is when it comes to UPI and Credit Card.

Preferred Mode of Digital Payments (in %)

In terms of preference, I did not think that people will still prefer UPI over a credit card. However, that seems to be the case. A lot of trust is yet to be built in the system to make it their preferred mode of payment.

· The second finding was related to why people are using digital payments:

Reason For Using Digital Payments (In %)

Convenience and money-saving are the top reasons, trust is not remotely the primary driver as per this point. Which does not seem to be the case. This point should be read with the next point, as looked at individually it does not give a complete picture.

· Preferred Mode for Small Transactions:

Preferred Mode for Small Value Transactions (Amount of transaction in INR) (In %)

The previous point should be read in conjunction with this point then only we get a clearer picture. We can notice that as the value of the transaction increases people don’t mind using the digital mode of payments. That shows that there is a level of trust, otherwise, they would not have used digital mode when transacting for larger ticket sized payments. The other reason that it might be happening is that it would generally be the folks who are well off who would be making larger ticket sized transactions. So a lot more clarity is needed here.

· Awareness about the Digital Payment Products:

Educational Qualification wise awareness (In %)

I think this point is pretty intuitive. As you are more qualified than your awareness increases. However, what it does not capture is the behaviour. Because awareness does not amount to usage. Drawing from my personal experience. Every elder person in my family is a Post Graduate but none of them has ever used UPI. And at least a couple of them are not even comfortable using digital transactions of any sort, they like to use Cheques nothing else. So would have liked to have deeper insights.

This point shows that directionally we are moving in an environment where digital transactions would not face friction because of awareness.

For the complete report, please click here