India’s e-commerce consumer payments for goods and services market is set to increase from US$49bn in 2019 to US$91bn by 2023, according to GlobalData, a leading data and analytics company.

Indian consumers’ preference for cash is declining, and its share has halved in the last 12 months. Cash now accounts for just 8.8% of all online payments, which is its lowest share ever. This is lower than even bank transfers, which at 14% is now the third-largest online payment method in India.

GlobalData’s 2019 Consumer Payments Insight Survey reveals that Indian consumers continue to favor cards for online payments. Debit, credit, charge and prepaid cards collectively account for 39.6% of all online payments in 2019. This is closely followed by alternative payment solutions, which collectively account for 37.6%.

Siddharth Agarwal, Practice Head at GlobalData, comments: “Online spending in India is rising on the back of increasing convenience, growing consumer confidence in online payments and aggressive promotional strategies by online retailers in partnership with various digital payment methods.”

Alternative payment methods gained significant traction among Indian consumers and have gradually displaced cash to become the second most used payment solution.

Agarwal adds: “While many new online payment solutions have entered the Indian market in the past few years, Paytm remains at the forefront of this shift. It has achieved a double-digit market share for the first time this year, accounting for almost 12% of online payments.”

Amazon Pay, which was introduced in December 2016, is the biggest gainer with 6.5% of all online payments in 2019, up from 2.8% in 2018. This growth has been supported by the large customer base already shopping on Amazon’s marketplace, with users encouraged to use its digital wallet through aggressive cashback offers.

Siddharth concludes: “While cards will continue to remain popular for online payments, alternative solutions could actually overtake them in the next few years. It will be interesting to see whether the declining popularity of cash for online purchases will start to be reflected in the wider payments space. At the very least, the future of e-commerce looks set to be cashless.”