Offline digital transactions have experienced significant growth, increasing from 48% to 56% in just one year. Women are leading this trend, with 89% opting for digital methods for online spending, while 80% of women entrepreneurs manage their businesses without cash, primarily using UPI. Gen Z and Millennials are influencing the digital payment landscape, as nearly half prefer credit cards for their rewards and flexibility, with 65% applying for a credit card when they receive their first paycheck. The rise of e-commerce is contributing to credit adoption, with 65% of co-branded cardholders selecting e-commerce cards for integrated rewards. Additionally, the growth of offline digital payments in non-metro areas is nearing 50%, compared to 62% in metro regions.
According to the “How Urban India Pays 2025” report released by Kearney India in partnership with Amazon Pay, digital payment volumes in urban India surged by 35% in FY25, driven by women, young professionals, and consumers from small towns who are adopting new payment methods. The report shows that aspirational buyers are expanding their digital transactions across various spending categories, favoring digital options not only for high-value purchases like electronics and apparel but also for regular expenses such as utility bills, which rose from 83% in 2024 to 87% in 2025. Women are becoming prominent contributors to this shift, with 89% preferring digital payments for online purchases, a significant move away from cash reliance.
Among women entrepreneurs, 80% conduct their businesses digitally, with UPI (34%) leading, followed by cards (20%) and wallets (8%). Affluent women are increasingly favoring credit-led transactions, with 69% choosing credit cards for their rewards and financial flexibility, while middle-income groups prefer UPI and wallets for daily expenses. Shashwat Sharma, Partner and Financial Services Lead at Kearney India, stated, “India’s digital payment revolution is accelerating at an unprecedented pace, with retail digital transactions set to exceed $7 trillion well before 2030.” He emphasized that digital payments are the preferred method for 90% of online purchases and are quickly transforming offline spending.
With increasing financial independence, 57% of women are taking charge of their finances, and 80% of women entrepreneurs prefer operating their businesses cashlessly. Gen Z and Millennials are reshaping credit adoption in India, with 65% of respondents applying for their first credit card early in their careers. Sharma noted that future opportunities lie in building trust, personalization, and inclusive financial products, presenting vast growth potential for businesses willing to engage in India’s digital-first future. The report also highlights that India’s digital landscape is expanding beyond metropolitan areas, with offline usage in small towns rising to 50% in FY25, compared to 62% in metros.
Cities like Lucknow, Jaipur, Kochi, and Bhubaneswar are rapidly catching up, indicating strong openness to digital payments and transaction growth. Innovations such as tap-and-go payments, co-branded credit cards, and buy-now-pay-later options are gaining popularity for their speed, convenience, and inclusivity. Vikas Bansal, CEO of Amazon Pay India, remarked, “India’s payment landscape is evolving rapidly, and we’re witnessing this transformation across the entire nation, not limited to metros. The increase in digital payment preference for offline transactions from 48% to 56% in a year reflects a fundamental change in consumer behavior. The rise in co-branded credit cards and the strong preference for digital utility bill payments, now at 87%, indicate a maturing digital payment ecosystem.
At Amazon Pay, we’re facilitating this transition with a broad range of solutions, from UPI and wallet services for small transactions to our Amazon Pay ICICI Bank credit card and Pay Later options, making digital payments more rewarding and accessible for all Indians.” Digital payments are becoming the default choice in urban India, extending beyond online shopping to everyday transactions. Adoption of offline digital payments has increased from 48% in 2024 to 56% in 2025, with consumers embracing UPI, cards, and contactless payments in physical stores. The shift is particularly noticeable in credit adoption, with 65% of co-branded cardholders selecting shopping-linked cards for integrated rewards.
In metropolitan areas, more consumers are using tap-and-go payments, while credit-driven methods are becoming popular for larger purchases in electronics, apparel, and lifestyle sectors. This signifies India’s transition from cash reliance to a digitally-driven payment ecosystem, where convenience and rewards seamlessly integrate with shopping experiences. Trust and convenience remain crucial for adoption, as most consumers stick with their chosen payment methods due to their simplicity and reliability, while safety and security are vital for fostering loyalty. These changes hint at a future where digital payments in India will be shaped not only by access but also by confidence, personalization, and inclusion. The findings of the How Urban India Pays report reveal a significant change in consumer behavior.
With increasing adoption across demographics, improved security measures, and innovative payment solutions, India is not merely adopting digital payments but is actively redefining its financial future.