New Delhi: Cashless payment has made deep penetration in the country country's transaction system, with 90 percent consumers saying that they prefer digital payments when making online purchases.


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Kearney India and Amazon Pay India have released of a comprehensive new report, "How Urban India Pays", in which it has found India's rapid shift towards a cashless economy, driven by a surge in digital payment adoption by both consumers and merchants. 


This comprehensive study, based on a survey spanning 120 cities and over 6,000 consumers and 1,000 merchants, reveals a seismic shift in payment preferences.


Men and women are embracing digital payments equally as both use digital payments in about 72% of their transactions, indicating gender parity.


Affluent customers lead the way with highest Degree of Digital Payment Usage (DDPU), tending to use various modes of digital payments for 80 percent of their transaction. Meanwhile, consumers in teh aspiring segment use digital payment for 67 percent of transaction, the study found.


The study further stated that Millennials and Gen X are leading in the adoption of all types of digital payment instruments. Additionally boomers have significant adoption of digital payments, with higher card and wallet usage than the younger cohorts.


The top six metros—Delhi and NCR, Mumbai and its suburbs, Bangalore, Kolkata, Chennai, and Hyderabad—exhibit both high DDPU scores and strong retail potential. Furthermore, cities such as Ahmedabad, Pune, Indore, Jaipur, Lucknow, Bhopal, and Bhubaneswar present an intriguing pattern. Despite their relatively lower retail potential when compared with the top metros, these cities demonstrate a DDPU comparable with the larger metros. This indicates a widespread, robust penetration of digital payments across varying urban scales, significantly influencing the landscape of retail commerce in India.


The study said that 36% customers in Southern India prefer UPI over cash closely followed by the West and North-Central(35%), Northeast(32%) and East(31%). It said, consumers in small towns (population of less than 5 lakhs) highlighted that 65% of their payment transactions are digital, while consumers in larger cities (top six metros and cities with population between 15 lakhs and 50 lakhs), cited this ratio to be 75%.