Representative image for digital payments.
Credit: iStock
Mumbai: Out of every Rs 100 spent on retail, Rs 74 is now paid digitally, according to a NeoGrowth survey of 21,000 MSME retail outlets across 29 top cities, covering over Rs 35,000 crore in annual revenue.
NeoGrowth’s 9th edition of its NeoInsights study, “How India Pays”, highlights a sharp behavioural shift in India’s retail economy – with 74% of retail spending in these cities now digital, up from 45% just two years ago.
Digital retail transactions – spanning UPI payments, credit cards, and debit cards – have become an integral part of everyday spending, with usage continuing to rise across India, the report notes.
“Digital payments in India have moved from being an urban privilege to becoming a national standard. What we are witnessing is a behavioural transformation, powered by technology.
From kiranas to kiosks, India’s retailers are redefining adoption and efficiency in digital modes of transacting. This is accelerating the formalisation of the economy by creating digital trails,” said Arun Nayyar, Managing Director and CEO, NeoGrowth, in a press statement on Friday.
“At the same time, it’s generating rich data and laying the groundwork for more democratic access to credit. We believe this shift is not just about the convenience of payment; it’s about trust in a future-ready ecosystem,” he added.
The study revealed that India’s digital payment habits are now deeply embedded into everyday life. From personal grooming (83%) to grocery runs (68%) to vehicle maintenance (80%), digital transactions dominate both discretionary and essential categories. Groceries (68%) and fuel (63%) are quickly catching up as well.
Among top cities, Hyderabad (82%), Bengaluru (79%), and Pune (79%) lead in digital payment adoption, while Visakhapatnam (76%), Nagpur (71%), and Chandigarh (68%) top the list beyond metros.
In contrast, cities like Ahmedabad (60%), Kolkata (55%), Jamshedpur (54%), Madurai (52%), and Rajkot (48%) still rely heavily on cash. The report suggests this gap is less about access and more about behaviour: a higher dependency on cash-based transactions and resistance to changing familiar payment patterns may have slowed digital adoption in these areas.