India's retail digital payments can double to $7 trillion by 2030: Amazon Pay and Kerney report

Retail digital payments in India are expected to double to $7 trillion by 2030, primarily driven by Unified Payments Interface (UPI) adoption and usage.

India's everyday retail digital payments may double to $7 trillion by 2030, compared to the present levels, PTI wrote, citing a joint study by Kerney and Amazon Pay titled 'How Urban India Pays'. The growth is credited primarily to the Unified Payments Interface (UPI), which has seen usage grow by 138% from the financial year 2017-18 to 2023-24.

UPI is an instant payment system developed by the NPCI. (Representative)

How much has India's retail digital payments grown so far?

India's retail digital payments have grown from $300 billion in the financial year 2017-18 to $3.6 trillion in 2023-24, according to the report, which states that India's e-commerce market was valued at $75-80 billion in 2022 and is expected to grow by 21% until 2030.

India accounts for 46% of the entire world's digital transaction volumes in 2022," the report read.

Cards and digital wallets contribute 10% of digital transaction value.

What percentage of Indians prefer using digital payments?

90% of the online survey's over 6,000 respondents across 120 cities preferred digital payments to make online purchases, with affluent customers using digital payments for as much as 80% of their transactions.

Millenials and Gen X use digital payments the most, with up to 72% of their transactions being done digitally.

Digital modes of payment make for about 69% of transaction volumes for over 1000 Indian merchants who were surveyed. Even street vendors like paan shops, fruit and flower sellers, food stalls, and kirana stores are joining the digital payment brigade, the report read, adding that the challenges they face include issues of financial fraud, limited connectivity and trust.

Where will India see the most growth in digital payments adoption next?

The next wave of digital payments growth will be through lower-income group consumers and from smaller towns, the report read.

Currently for small towns, 65% of respondents claimed to use digital transactions, while the figure was 75% in larger cities.

Cities like Lucknow, Patna, Bhopal, Jaipur, Bhubaneswar, Indore, Ahmedabad and Pune, nearly match larger metropolitan cities when it comes to digital payments usage, despite having a lower retail potential than India's top six metros.