Usage of digital banking and contactless payments has surged during the COVID-19 pandemic as Indian consumers are opting for digital and contact-free payment experiences instead of using cash. These findings are part of a new report from FIS.
A paradigm shift in consumer behavior is underway for where and how consumers make payments, carry out transactions and shop. FIS’ PACE Pulse Survey 2020 found that India has seen a surge in digital payments amidst the COVID-19 pandemic. The results show that 68 percent of Indians are now using online or mobile banking to conduct financial transactions, and 51 percent expect to continue using these banking and payment methods after the pandemic. Nearly half (48 percent) of respondents stated they expect to use contactless payments instead of cash or cards in the post COVID-19 world.
Additionally, the report shows that young and senior Gen Y (24-39 years) consumers are more adaptive to changes in how they are making payments than other age groups.
“The payments landscape is witnessing a disruptive change, and consumer penchants have moved more voraciously toward contactless payments while offering new opportunities for innovation and growth,” said Mahesh Ramamoorthy, Managing Director at FIS. “What’s more, this survey shows that these new habits are likely permanent and will continue in the post-pandemic world. For financial institutions and merchants that serve these consumers, it’s imperative that they understand these trends and create products and services that cater to the changing needs of their customers.”
The report also shows that use of mobile payment wallets is on the rise in India. The total digital wallet transactions in India nearly doubled to 253.2 crore in May this year, from 124.3 crore in February 2020, according to Reserve Bank of India (RBI) data; the total value transacted from digital wallets grew even faster to ₹11,080 crore in May, from in ₹2,836 crore in February. The 2020 FIS PACE pulse survey shows more than 93 percent of respondents stated they use mobile wallets to make payments, with young and senior Gen Y consumers the most active.
The COVID-19 pandemic has taken a toll on people’s personal finances in India, the FIS survey revealed. Nearly half (49 percent) of respondents said they have faced salary cuts over past three months, while twenty percent faced layoffs or furlough. Forty-eight percent of respondents said they will not be able to sustain themselves financially for more than three months if they face a decline in income.