Survey reveals that credit cards and EMIs account for one-third of digital payments in India.

India’s digital payment landscape continues to evolve at a rapid pace, and a new survey has revealed a fascinating shift in how people are transacting online. According to the survey, credit cards and equated monthly installments (EMIs) now account for one-third of the total digital payments in India. This statistic highlights a growing trend towards leveraging credit options for digital transactions and points to the increasing financial sophistication of Indian consumers.

The Rise of Digital Payments in India

Over the past few years, India has witnessed an explosive growth in the adoption of digital payment methods. The country’s push for a cashless economy, coupled with the growing penetration of smartphones and internet access, has fueled the shift towards online transactions. The government’s initiatives such as the Digital India campaign and the promotion of the Unified Payments Interface (UPI) have also played a significant role in accelerating the adoption of digital payments across urban and rural regions alike.

With the COVID-19 pandemic further catalyzing the shift to online shopping and digital transactions, a wider variety of payment options has become available to Indian consumers. One of the most interesting trends highlighted in the survey is the increasing role that credit cards and EMIs are playing in the digital payment space.

Credit Cards: A Key Driver of Digital Payments

Credit cards have long been a popular payment method for large purchases, both online and offline. However, as e-commerce continues to thrive in India, the use of credit cards for online payments has surged. Credit cards are particularly favored for their convenience and the ability to make instant payments for purchases. They also offer rewards, cashback, and loyalty points, making them an attractive payment option for many users.

According to the survey, credit cards now account for a significant portion of all digital payments in the country. Consumers are increasingly using them for everything from purchasing electronics and fashion items to paying for services and subscriptions. The ability to defer payments to a later date and the availability of attractive interest-free credit periods have further incentivized people to use credit cards for digital transactions.

Another major factor contributing to the rise of credit card usage is the availability of easy credit. Many banks and financial institutions in India offer credit cards with varying benefits and features, making it easier for consumers to access credit and shop online. As more people gain access to credit cards and the overall financial ecosystem becomes more inclusive, the percentage of digital payments made through credit cards continues to increase.

The Growing Popularity of EMIs

Another noteworthy trend from the survey is the increasing preference for Equated Monthly Installments (EMIs) as a payment option for digital transactions. EMIs allow consumers to break up the cost of a purchase into smaller, more manageable payments over a period of time. This feature has gained traction, especially among consumers who prefer to make high-value purchases but do not want to pay the full amount upfront.

EMIs have been a part of traditional retail shopping for years, but their role in the digital payments space has expanded significantly. Today, major e-commerce platforms and financial institutions offer the option to convert purchases into EMIs, enabling consumers to buy everything from smartphones and laptops to home appliances and furniture on easy payment terms. This option is particularly attractive for buyers who may not have access to large sums of money at once but still want to take advantage of online deals and discounts.

Additionally, financial institutions and credit card companies have partnered with e-commerce platforms to offer zero-interest EMIs on select products, further driving the adoption of this payment method. The rise of buy-now-pay-later services, which function similarly to EMIs, has also added to this trend, making it easier for consumers to access credit and make payments in installments.

Impact on Indian Consumers and the Economy

The increasing role of credit cards and EMIs in digital payments reflects the changing attitudes towards credit in India. As the country’s middle class grows, so does the appetite for higher-value purchases and the desire for more flexible payment options. By allowing consumers to make large purchases and spread the cost over time, EMIs, in particular, are helping drive consumption and economic growth.

This trend also indicates that Indian consumers are becoming more comfortable with managing credit and are increasingly aware of the financial products available to them. However, the rise of credit card usage and EMIs also brings with it challenges related to consumer debt management. Financial literacy will play a crucial role in ensuring that consumers are able to responsibly manage their credit and avoid falling into debt traps.

For businesses, the adoption of credit cards and EMIs as payment methods opens up new opportunities for growth. By offering these options, companies can cater to a larger pool of potential customers who may have been hesitant to make large purchases otherwise. This trend is particularly significant for e-commerce platforms, where the ability to offer credit options can increase the average transaction value and lead to higher customer satisfaction.

Conclusion

The survey’s finding that credit cards and EMIs account for one-third of digital payments in India paints a clear picture of how the country’s online payment landscape is changing. With credit options becoming an integral part of digital transactions, consumers are benefiting from greater convenience and flexibility, while businesses are seeing increased sales and customer engagement.

As India continues to move toward a cashless economy, the role of credit cards and EMIs is only expected to grow, driving further innovation in digital payment solutions. The key for consumers and businesses alike will be to ensure that credit is used responsibly, with adequate financial education and planning to ensure that the benefits of digital payments are realized without the risk of overextension.