Seven in 10 medium, small, and micro enterprises (MSME) believe that more than half of their retail customers will make payments using UPI, a new report revealed.
In its report titled "Decoding Digital Payments: A Retailer Perspective", NeoGrowth, a digital lender, registered with RBI that focuses on MSMEs studied data from around 3,000 retail customers and 1,000 retail sellers across the country. The study covered more than 25 Indian cities.
Highlighting the shift in payment behaviour among Indian customers, the findings of the study claimed that around 80 per cent of retailers use digital payment methods due to convenience. Additionally, 40 per cent of retailers use digital methods to pay back loans. Card usage payments are preferred by only 25 per cent of retailers.
Thanks to its convenience, as UPI is gaining popularity, card transactions have registered a dip of around 12 per cent across industry segments. The decline is more pronounced in bigger cities.
Managing Director and CEO of NeoGrowth, Arun Nayyar said “There has been a remarkable adoption of digital payments among retailers in India. MSME Retailers are increasingly recognizing the benefit of using digital payments in their business driven by ease of use and customer convenience. UPI is spearheading the adoption of digital payments among Retailers by ticking all the right boxes.”
Retail sellers have said that digital payments have helped them attract new consumers, the NeoGrowth report said.
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The widespread usage of UPI has resulted in a situation where new-age lenders are using the digital transaction histories of retailers for the purpose of granting them credit. The report said that almost 40 per cent of retailers now prefer digital payment to repay their loans.
