Alternative payments move mainstream in India
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Alternative payments have moved mainstream in India amid Covid-19, according to GlobalData.
Payment platforms such as mobile and digital wallets have gained popularity among online shoppers, gradually replacing traditional payments during the pandemic.
“The adoption of alternative payments has been on the rise since demonetization in 2016,” said Ravi Sharma, lead banking and payments analyst at GlobalData. “The recent Covid-19 outbreak has further accelerated the usage of alternative payments as consumers are increasingly using electronic payments to avoid exposing themselves to disease vectors while merchants are also insisting on the digital mode of payments.”
GlobalData’s 2020 Banking & Payments Survey found that the share of alternative payments in online transactions in India stands at 54 percent this year, followed by payment cards and cash, which accounted for 30.1 percent and 8.1 percent, respectively.
Google Pay has been one of the beneficiaries with 9.3 percent share in the e-commerce payments, a significant surge from 3.5 percent share last year.
“While alternative payment tools were initially available for online payments, they are now being used for in-store payments as well,” Sharma said.
“With merchants increasingly opting for QR code-based payments due to their cost-effectiveness, alternative payments will disrupt the country’s overall consumer payments space in a big way.”
Questions & Answers
Q.What proportion of online transactions in India now use alternative payment methods?
What proportion of online transactions in India now use alternative payment methods?
Alternative payments now account for 54 percent of online transactions in India this year. This figure is significantly higher than payment cards, which hold 30.1 percent, and cash, at 8.1 percent, showing a clear shift in consumer preference.
Q.What is driving the increased use of alternative payments, according to GlobalData?
What is driving the increased use of alternative payments, according to GlobalData?
The rise began with demonetisation in 2016, but the Covid-19 pandemic has accelerated it. Consumers use electronic payments to avoid disease exposure, while merchants increasingly insist on digital modes for transactions, pushing wider adoption.
Q.Are alternative payment methods only used for online purchases in India?
Are alternative payment methods only used for online purchases in India?
No, alternative payment methods are no longer limited to online purchases. They are now also being used for in-store payments, especially as merchants increasingly adopt cost-effective QR code-based systems for transactions in physical stores.
Q.Which specific payment platform has seen significant growth in e-commerce payments this year?
Which specific payment platform has seen significant growth in e-commerce payments this year?
Google Pay has experienced a notable surge in e-commerce payments. Its share has risen from 3.5 percent last year to 9.3 percent this year, making it one of the major beneficiaries of the shift towards alternative payment methods.
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