60% Click to Pay, the Rest Just Play: How Alt-Pay is Dominating India’s E-Commerce Game

In a major shift that’s changing the e-commerce landscape in India, alternative payment methods are knocking traditional cash and cards off the pedestal. According to a recent report by GlobalData, a leading data and analytics company, digital and mobile wallets are now the most popular way to pay online in India. These alternative payment methods make up a staggering 58.1% market share as of 2023.

The rise of these non-traditional payment methods is part of a larger boom in India’s e-commerce market. With a projected compound annual growth rate (CAGR) of 28.2%, the market value is expected to soar from INR2.8 trillion ($33.9 billion) in 2018 to INR9.7 trillion ($117.3 billion) by the end of this year. The rapid increase is propelled by factors like greater internet and smartphone penetration, faster delivery options from online retailers, and discounts. Additionally, government initiatives like Startup India and Digital India have provided the necessary tailwinds for this e-commerce bonanza.

While these might seem like pre-existing conditions for growth, the COVID-19 pandemic has acted as a catalyst, expediting the shift from in-store shopping to online platforms. Shoppers, wary of potential exposure to the virus, found it safer to make purchases from the comfort of their homes. Even as physical stores have reopened, the trend doesn’t show signs of reverting. According to forecasts, e-commerce payments in the country are slated to continue growing at a CAGR of 22.4% from 2023 to 2027, reaching a colossal INR21.8 trillion ($263.6 billion) in 2027.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, points out that the surge in alternative payments has its roots in India’s demonetization in 2016. The pandemic only accelerated this evolution as both merchants and consumers opted for digital payments to minimize potential health risks. Brands like Amazon Pay, Google Pay, and Paytm have become household names, capturing the lion’s share of this thriving market.

While alternative payments dominate, traditional payment cards still hold a 25.7% market share, with credit and charge cards preferred by online shoppers, making up a 15.4% slice of the pie. In a startling contrast, cash, which was once the cornerstone of retail payments, has dwindled in the online sphere, accounting for a meager 6.2% of the market share.

In the grand scheme, the uptrend in e-commerce sales in India is poised to persevere. The ecosystem, bolstered by consumer preference, improving payment infrastructure, and popular alternative payment solutions, will continue to grow and dominate the payment space in the coming years.

So, if you’re still clinging to your credit card or hoarding cash for online shopping, maybe it’s time to give these alternative payment methods a try. After all, more than half of India already has.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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