Alternative payment dominates India’s e-commerce market

The method accounts for almost 60% of the country’s e-commerce transactions.

Alternative payment methods such as mobile and digital wallets exceed cash and cards and have now become the most popular payment method in India accounting for 58.1% of the e-commerce transactions in 2023.

In a statement, Ravi Sharma, lead banking and payments analyst at GlobalData said alternative payments started to become popular since the demonetisation in 2016.

“The pandemic has accelerated this trend as both consumers and merchants preferred digital payments to avoid exposing themselves to disease vectors such as cash. The growing popularity of alternative payment brands among consumers and merchants also supported this trend,” Sharma said.

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Some of the popular alternative payment methods brands include Amazon Pay, Google Pay and Paytm.

It is followed by payment cards with a share of 25.7%, with credit and charge as the preferred card types, comprising around 15.4%.

Cash, meanwhile, is most commonly used for in-store purchases and only accounted for 6.2% of the e-commerce transactions.

“The uptrend in e-commerce sales in India is likely to continue over the next few years supported by the growing consumer preference, improving payment infrastructure, and growing popularity of alternative payment solutions with these solutions dominating the e-commerce payment space over the next few years,” Sharma said.