What are the most popular payment methods among Gen Z online shoppers in India?

Millennials and Generation Z are true digital natives, comfortable with the latest technologies and the convenience they offer. Growing up in a world saturated with social media, high-speed internet, and mobile phones, they share a common digital culture. Their preferences and attitudes often overlap, shaping a digital-centric lifestyle.

In their world, nearly everything is achievable with a simple swipe on their smartphones. This is particularly evident in their approach to payments. They anticipate seamless, instant transactions, leveraging their smartphones to purchase goods, pay for transportation, order meals, book vacations, and even manage investments. This reliance on digital payment methods reflects their expectations for efficiency and convenience in all aspects of life.

WHEN THEY PAY, IT’S DIGITAL-FIRST

Gen Z online shoppers in India prefer digital payment options, particularly e-wallets and UPI (Unified Payments Interface). According to a PwC report, 33% of urban dwellers and 34% of consumers in tier 2, 3, and 4 cities prefer UPI payments, while 29% of urban dwellers and 9% of rest of India consumers use e-wallets.

The rise of UPI has led to a decline in debit card usage for online shopping, with debit card usage having more than halved in the last two years. In ecommerce, credit card transactions jumped 22% to 131 million in September this year from 107 million in April last year, indicating a shift towards UPI and credit cards for online transactions.

The Global Payments report 2021 estimates BNPL (Buy Now Pay Later) growth at 53% CAGR, making it the fastest-growing online payment method in the near future. Indian Gen Zs are increasingly adopting BNPL as it increases affordability and convenience.

Gen Z consumers in India are used to hyper-personalised offerings and prefer brands that cater to their payment preferences. Brands seeking to earn their favour must offer multiple payment options, including e-wallets, UPI, and BNPL, to improve the shopping experience.

In conclusion, the adoption of UPI for online shopping has significantly impacted the Indian economy by making digital payments more convenient and accessible, reducing the use of cash, and boosting economic growth. As it caters to their preference for digital payments, convenience, and affordability. Brands that offer multiple payment options and personalised experiences are more likely to attract and retain Gen Z consumers in the Indian e-commerce market.