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Mobile and digital wallets surpass traditional payments in India's e-commerce

Cash transactions only comprise 6.2% of online purchases.

Alternative payment methods have dominated the e-commerce sector in India with a 58% market share in 2023 transactions, surpassing traditional modes, according to a GlobalData report.

The report noted that the country's e-commerce market is booming, driven by increased internet and smartphone penetration, coupled with growing consumer trust in online transactions. 

With 881.3 million internet subscribers as of March 2023, up from 865.9 million in December 2022, India's e-commerce market is projected to grow at a compound annual rate of 20.9%, reaching $315.5b (INR26.1 trillion) by 2028.

Ravi Sharma, lead banking and payments analyst at GlobalData, attributed this shift to various factors, including the impact of demonetisation and the acceleration of digital payments during the COVID-19 pandemic. 

ALSO READ: Four ways to adapt to a highly competitive 2024 retail landscape

Meanwhile, payment cards remain the second most popular method, with a 25.7% share, led by credit and charge cards. 

Cash transactions, prevalent in offline retail, have dwindled to a mere 6.2% share in online purchases.

Looking ahead, the future of e-commerce payments in India is seen as promising, driven by government initiatives such as "Make in India" and "Startup India," alongside a projected surge in online shoppers to 400–450 million by 2027. 

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