May 17, 2023
Seven out of ten retailers believe that over 50% of their sales will be conducted through United Payments Interface (UPI) in the next three years
Bengaluru saw a 14% increase in UPI transactions among digital payments, followed by Chennai and Hyderabad at 13% each
The Fast Moving Consumer Goods (FMCG) and retail segment observed a 14% increase in UPI transactions
Around 40% of retailers prefer digital payments for loan repayments
About 70% of Indian MSMEs believe that more than half of their retail sales will be conducted through UPI, according to a recent study by NeoGrowth, a digital lender in India.
The majority of retailers prefer UPI over other payment methods, with 70% choosing it for digital transactions. Instant payment receipts and convenience for customers were the primary motivations for retailers to adopt digital payments. More than half of the retailers reported an increase in sales and an improved customer experience after adopting digital payment modes, while 40% stated that digital payments helped attract new consumers.
The study, titled ‘Decoding Digital Payments: A Retailer Perspective,’ examined data from nearly 3,000 retailers and surveyed 1,000 retailers across the country. It covered digital payment adoption among Indian retailers in over 25 cities and 70 industry segments.
Experts said that retailers are recognizing the benefits of digital payments, driven by ease of use and customer convenience. UPI is leading the way in digital payment adoption among retailers, offering the right features.
The study also revealed that Bengaluru saw a 14% increase in UPI transactions among digital payments, followed by Chennai and Hyderabad at 13% each compared to pre-COVID levels. Smaller cities experienced a 4% increase. The FMCG and retail segment observed a 14% increase in UPI transactions, while Food & Beverage saw a 12% increase and Fashion & Lifestyle witnessed a 9% increase. The decline in card transactions across industry segments and locations, approximately 12% and 16% respectively, is attributed to the rising preference for contactless payment methods.
Digital payments have also facilitated new-age digital lenders in assessing retailers’ creditworthiness based on their transaction histories. Encouragingly, around 40% of retailers prefer digital payments for loan repayments.
Source: Economic Times