How Urban India Pays 2025 Study Finds 57%% of Women taking charge of their finances, as Gen Z and Millennials Drive Credit Adoption
Digital payment volumes in urban India rose 35% in FY25, led by women, young professionals, and small-town consumers embracing new ways to pay digitally, according to the “How Urban India Pays 2025”report released today by Kearney India in collaboration with Amazon Pay. The report highlights how aspirational buyers are broadening digital transactions across spending categories, with digital methods now preferred not just for high value purchases like electronicsand apparel but also for recurring categories such as utility bills (87% in 2025 vs 83% in 2024), reshaping the payments landscape as India moves toward a $7 trillion digital economy by 2030.
Women, Gen Z & Millennials Driving Change: Women are emerging as powerful drivers of this transformation, with 89% preferring digital modes for online purchases, a shift from earlier reliance on cash. This trend extends to women entrepreneurs, where 80% run their businesses digitally, with UPI (34%) leading the charge, followed by cards (20%), and wallets (8%).Affluent women are also displaying a greater inclination toward credit-led transactions — 69% prefer credit cards, drawn by rewards and financial flexibility — while middle-income segments continue to favour UPI and wallets for their everyday spends.
Expanding Beyond Metros
“India’s payment landscape is evolving rapidly, and we’re seeing this transformation across the entire nation, not just in metros,” said Vikas Bansal, CEO of Amazon Pay India. “The growth in digital payment preference for offline transactions from 48% to 56% in just a year reflects a fundamental shift in consumer behaviour. The rising adoption of co-branded credit cards and the strong preference for digital utility bill payments, at 87%, signal a maturing digital payment ecosystem. At Amazon Pay, we’re enabling this transition through our comprehensive suite of solutions – from UPI and wallet for small value transactions to our Amazon Pay ICICI Bank credit card and Pay Later options, making digital payments more rewarding and accessible for all Indians”
Deeper Consumer Adoption
Digital payments are becoming the default choice across urban India, extending beyond online shopping into everyday transactions. Offline digital payment adoption has surged from 48% in 2024 to 56% in 2025, as consumers embrace UPI, cards, and contactless modes in physical stores.The shift is particularly evident in credit adoption, with 65% of co-branded cardholders choosing shopping-linked (e-commerce) cards for integrated rewards. In metros, more consumers are aware and using tap-and-go payments, while credit-led methods are gaining traction for big-ticket purchases across electronics, apparel, and lifestyle categories. This marks India’s evolution from cash dependence to a digitally-driven payment ecosystem where convenience and rewards seamlessly merge with shopping experiences.
The report highlights that trust and convenience remain the cornerstones of adoption. Most consumers continue with their chosen payment method because it is simple and reliable, while safety and security are key to driving loyalty. Together, these shifts point to a future where digital payments in India will be shaped not just by access, but by confidence, personalization, and inclusion.
The How Urban India Pays report findings underscore a fundamental shift in consumer behaviour. With rising adoption across demographics, enhanced security measures, and innovative payment solutions, India is not just embracing digital payments—it’s redefining the future of money.
To access the full report- click here
About Kearney
Kearney is a leading global management consulting firm with more than 5,700 people working in more than 40 countries. We work with more than three-quarters of the Fortune Global 500, as well as with the most influential governmental and nonprofit organizations. For nearly 100 years, we have been a trusted advisor to C-suites, government bodies, and nonprofit organizations. Our people make us who we are. Driven tobe the difference between a big idea and making it happen; we work alongside our clients to regenerate their businesses to create a future that works for everyone.
About Amazon Pay
Amazon Pay is a trusted, convenient, and rewarding way to pay for anything, anywhere—on and off Amazon.in. It offers customers a wide choice of payment methods such as Amazon Pay UPI, Amazon Pay Balance, Amazon Pay Later, and the Amazon Pay ICICI Bank Credit Card. With the vision of simplifying lives and fulfilling aspirations, Amazon Pay is building a frictionless, inclusive digital ecosystem that supports India’s transition to a less-cash economy.
For more information on Amazon Pay visit: https://www.amazon.in/amazonpay/home
Follow us on LinkedIn: https://www.linkedin.com/company/amazon-pay-india/
Some key insights from the report:
Digital payments continue to grow
Indian consumers are deeply aspirational, constantly seeking better and newer ways of living. This openness to change is vividly reflected in the country’s digital journey as retail digital payments are poised to surpass $7 trillion by 2030. Everyday transactions are shifting online at an extraordinary pace, with transaction volumes in FY25 rising 35%, ahead of value growth at 24%.
India’s digital payment surge is being powered by three pillars – rising customer adoption, government-led inclusion initiatives, and ecosystem-driven digital acceleration.
Steadily gaining preference over cash, digital payment modes remain dominant, especially in online buys (~90% preference) and are also rising offline buys—with preference for digital modes grew from 48% in 2024 to 56% in 2025.
The Unified Payments Interface (UPI) remains the key entry point, while co-branded credit cards are helping in wider credit card adoption and reflecting the industry’s growing focus on this segment.
Spend categories such as utility and subscriptions reported the highest preference for digital payment methods. 87% of respondents preferred digital modes for utility bills compared with ~83% last year. After UPI, 13 to 14% of respondents preferred digital wallets in utility and subscriptions, higher than 8 to 10% in other categories. Credit instruments such as credit cards and buy now, pay later (BNPL) are favoured for high-value spends – 19% of respondents use them for electronics, 14% of respondents use it for apparel, and 13% respondents use it for hobbies, while smaller daily spends still lean on cash and UPI. Over 90% of credit card users prefer using it for purchases above INR 1,000.
Financial independence further awareness and experimentation as consumers continue to try new digital payment modes. Tap-and-go is catching on with ~21% of respondents using it, led by metro cities and Millennials, who value ease of use through quick, contactless, no-PIN transactions—hinting at a growing appetite for smooth payment experiences.
Young India, smart money: Income-Age matrix shapes digital payment future
Income continues to have the highest impact on digital payment behavior, followed by employment, age and gender. 71% of affluent respondents preferring digital modes for offline purchases compared with only 50% of aspiring respondents.
Employment emerges as a strong influencer with 59% of income-earning respondents preferring digital modes for offline purchases compared with 47% of those who do not earn incomes.
The top 6 metros continue to lead digital adoption in offline at 62% while 50% of respondents from small towns prefer digital for buying offline.
West translates into the highest digital adoption in offline at 59%.
Digital Payment gender gap narrows: 80% of women entrepreneurs embrace cashless business
As digital revolution empowers women, 57% are taking charge of their finances. Men and women continue to be almost on par, with 89% of women and 88% of men preferring digital modes of payment for online purchases.
Women’s digital payment adoption accelerates with financial independence and accessibility—affluent women favor credit cards (69%) as a mark of confidence in aspirations and sophisticated products; while aspiring and middle-class women prefer UPI and wallets, with professionally active women showing the most diverse payment behaviors. In terms of demographic area, 63% of women from metro areas prefer digital payment modes for offline transactions compared to 47% women from small towns.
Women exhibit more loyalty to digital payment methods and switch less often than men, with 27% of women never switching their preferred payment method, as opposed to only 21% of men.
80% of women entrepreneur respondents prefer digital payments for their businesses, with UPI leading the charge (34%), followed by cards(20%) and wallets (8%).
Financial independence is reshaping Gen Z and Millennials payment behavior
Financial independence among Gen Z and Millennial income-earning professionals (18–43 years) leads to equivalent digital payment adoption behavior across large and smaller cities.
49% of Millennials & Gen Z respondents choose credit cards as they are attracted to cashbacks and rewards, while also valuing easy approval processes and confidence in their ability to repay. There’s a split in usage philosophy – 39% are drawn to credit for immediate gratification (“living in the moment”), while a slightly larger segment (43%) use credit tools more strategically for financial flexibility and planning purposes.
Credit-led payment methods tend to have a dual impact on consumer behavior for Gen Z & Millennials. While for many, the ease, availability, instant rewards or deals and social influence spark spontaneous splurges (65%), a savvy segment (25%) uses these tools find the best bargains and to track spending.
65% respondents applied for a credit card right after starting their first job, with the top reasons being to manage expenses with a credit line (32%), cashbacks & rewards (30%) and to build an early credit score (23%) – reflecting a mindset rooted in financial foresight.
E-commerce is a catalyst in digital payments growth
Users prefer cash and UPI for daily needs, whereas high-value categories such as furniture and durables such as mobiles, home appliances, etc. continue to attract a high preference for cards, more notably credit cards.
Payment functionality is now a mainstream for platforms. More than 80% of respondents who use E-Commerce marketplace/platforms for 3 or more services also rely on the platform for payment services.
65% of co-branded credit card users own e-commerce co-branded credit cards—making credit card transactions more accessible through everyday platforms and targeted rewards.
Beyond convenience: How trust, personalization, and financial literacy will define payment’s future
Trust, speed, rewards and convenience drive growth in digital adoption
57% of the respondents who prefer digital payments for online purchases prefer it due to its widespread acceptance—significantly up from last year’s 40%.
With digital payment options multiplying, 45% respondents cited trustworthiness, 44% cited faster transactions, and 41% were motivated by better rewards when adopting a digital payment method for the first time. While these draw customers, 61% of respondents stay loyal to a digital mode of payment because of its convenience.
Improved internet connectivity is driving a digital shift. Only 31% of cash-preferring users cited Internet/device issues for preferring cash in 2025, down from 51% last year
Strengthening trust further through strong security, as concerns about fraud still hold many users back
Creating personalized, frictionless experiences on platforms to ensure user loyalty
Driving adoption through inclusive access – reaching even small towns – and increased financial literacy and empowerment
