Cash continues to rule small-sized transactions less than Rs 500: Survey

Use of credit rises with increase in transaction value

Even as digital payment methods such as Unified Payments Interface (UPI) grow in popularity, there continues to be a strong preference to transact using cash for small ticket transactions less than Rs 500, a survey shows.

The preference for UPI remains strong for transaction values between Rs 500 and Rs 1,999, with about 47 per cent of individuals preferring the payment method for such transactions, a joint survey by Kearney India and Amazon Pay India's How Urban India Pays report said.

UPI continues to have a strong preference in online channels with about 53 per cent of individuals preferring to use the product.

Meanwhile, the preference for credit instruments such as buy now, pay later (BNPL) products and credit cards increases with the rise in ticket size of a purchase.

The study polled 6,000 customers and 1,000 merchants across 120 cities including metros and non-metros across the country. The study was conducted during the first quarter of CY2024.

Preference of payment instruments across online, offline channels

	% of respondents
Type	Online	Offline
Cash	10	52
UPI	53	25
Digital Wallet	14	8
Credit Card	11	6
Debit Card	5	5
Prepaid Card	< 1	1
BNPL	2	1
Netbanking	5	2

Preference of payment modes across transaction sizes

Transaction sizes (% of respondents)

        Type Less than Rs 500 Rs 500-999 Rs 1,000-1,999 Rs 2000-4,999 > Rs 5,000 Cash 51 31 24 23 23 UPI 39 47 46 39 32 Digital Wallet 7 9 8 6 4 Credit Card 2 5 10 14 18 Debit Card 1 4 7 10 11 Prepaid Card - 1 1 1 1 BNPL - 1 1 2 2 Netbanking < 1 1 3 5 10 Source: Kearney India's and Amazon Pay India's How Urban India Pays report