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A total of 2,240 respondents were surveyed for the report. | Photo: Bloomberg
More than 40 per cent of consumers in Tier 3 to 6 cities use digital payment on a daily basis, while 45 per cent claimed to use it once in two days, a new survey report has said.
“This reflects the frequent usage of digital payments by consumers, even in Tier 3 to 6 locations of the country,” said a report by Chase India on The State of Digital Payments in India.
The report identifies the key challenges faced by merchants and consumers in the adoption of digital payment services at the grassroots level.
According to the report, nearly half of the merchants who are not using digital payments in rural India are unaware of the service.
In contrast, a staggering 94 per cent of consumers who are not using digital payments are aware of it but still don’t use it, as they face issues like lack of internet connectivity, limited knowledge, mistrust in online payments and service-related problems.
The report added that around 74 per cent of consumers claimed to be using digital payment services for a transaction a family member made.
The report said around 41 per cent of merchants claimed to receive less than 25 per cent of their sales through digital payments, around 15 per cent of merchants claimed to receive over 50 per cent of their sales through digital payments.
“This shows the potential left to be tapped with respect to increasing the usage of digital payments at the grassroots level,” the report said.
A total of 2,240 respondents were surveyed for the report, including 1,184 consumers and 1,056 merchants, spread across 16 districts, covering eight states in different geographic zones of the country.
The report also said that lack of awareness about digital payments was a crucial finding. Around 46 per cent of merchants had never used digital payments because they were unaware of it.
The survey revealed that, on average, around 36 per cent of merchants claimed to be processing over 50 digital payment transactions every month. Also, around 23 per cent of merchants claimed to be processing not more than 1 digital payment transaction every alternate day.
Most merchants process digital payment transactions of less than Rs 15,000 every month. Only a handful of merchants claimed to process digital payments of over Rs 1 lakh.
The main challenges that hinder the adoption of digital payments were inadequate infrastructure, service-related issues, capacity constraints and lack of trust in digital Payments, it said.
“KYC is a vital step in onboarding merchants for using digital payments services. However, the survey discovered that nearly one in three merchants faced difficulties in completing the KYC process due to a lack of requisite documents, capacity constraints and the time taken for onboarding, among other reasons,” the report said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Aug 27 2024 | 5:17 PM IST
