According to a recent study by Amazon Pay and Kearney, a stark difference exists in how Indian consumers make digital payments: the Unified Payments Interface (UPI) is primarily used for daily expenditures, while credit cards are preferred for big-ticket purchases.
UPI is now the preferred mode for small-ticket, day-to-day transactions, including grocery purchases, utility bills, and online shopping. In 2024, UPI accounted for 65% of domestic digital payments, primarily for small ticket sizes. The trend is complemented by increasing women and young professional user adoption, who prefer the ease and universal acceptability of UPI.
However, the use of credit cards has been gradually increasing for making large purchases, such as electronics, furniture, and vacations.
The figures obtained from the comparison of transaction amounts from one financial year to the next show a 50% increase, from Rs. 3,422 in FY18-19 to INR 5,141 in FY23-24.
Rewards schemes, cashback deals, and the option to pay large sums in timely installments are the significant factors behind this increase.
Approximately 65% of young professionals will have a credit card for different purposes, such as wedding expenses and building credit scores, and at the same time, benefit from rewards.
In the coming days, India will be one of the countries to integrate biometric authentication into digital payments effectively. By October 8, 2025, facial and fingerprint-based authentication will be implemented for UPI to enhance the efficiency and security of payment transactions.
On the whole, UPI stands as the dominant force in daily deals due to its quick and straightforward transactions. For this reason, credit cards are also being used for big sales, and thus they will fill the gap between the customer and rewards. This separation is a sign of a shifting course in Indian digital payments.