Payment methods in India have shifted from cash and cards to real time, mobile first solutions in just a few years. According to the Reserve Bank of India, Unified Payments Interface (UPI) now accounts for around 83% of the country’s digital payment volume, highlighting how dominant account to account payments have become in everyday commerce. At the same time, cards, wallets, and pay on delivery still play important roles in specific sectors and customer segments.
Overview Of Payment Methods In India
When you look at payment methods in India, it helps to group them by how money moves and what customer needs they solve.
UPI And Real Time Bank Payments
UPI is now the default way many consumers pay online and in store. Customers link a bank account to a UPI app, create a virtual payment address or use their mobile number, and then pay by scanning a QR code or approving a collect request.
Key points about UPI:
- Instant account to account transfer, 24×7
- No card rails needed, which can lower acceptance costs
- Very strong network effects, since most banks and major apps support it
- Used for peer to peer, peer to merchant, subscription style payments, and even “UPI on delivery”
Official data from India’s Ministry of Finance shows UPI transactions growing from 92 crore in FY 2017 18 to 13,116 crore in FY 2023 24, at a compound annual growth rate of 129 percent. UPI also accounts for about 70 percent of all digital payment transactions in that period.
For most domestic businesses, UPI is now a non negotiable method to support.
Cards: Credit, Debit, And Prepaid
Cards still matter, especially in categories where credit and rewards are important, such as travel, electronics, or higher ticket fashion. The mix in India includes:
- Domestic RuPay cards
- International schemes such as Visa and Mastercard
- Credit, debit, and prepaid products
Cards are widely used for:
- E commerce checkouts
- Recurring payments with tokenization
- In store acceptance via POS terminals and contactless
From a merchant perspective:
- Cards can bring higher average order values due to credit lines
- MDR and scheme fees must be monitored carefully
- Tokenization and PCI DSS compliance add complexity that providers often handle on your behalf
Net Banking, NEFT, IMPS, And RTGS
Before UPI, net banking was the main way to pay directly from bank accounts. It remains relevant for:
- Customers who prefer traditional internet banking flows
- B2B or higher value transactions
- Certain sectors where corporate policies mandate bank transfers
IMPS, NEFT, and RTGS support real time or near real time settlements between banks. Many payment gateways abstract these rails behind a simple “pay by bank” option, often combined with UPI.
Mobile Wallets And Super Apps
Wallets and super apps hold balances or tokens for cards and bank accounts. In India, this segment is tightly connected to UPI, since many leading wallets are also UPI apps.
Wallets can help merchants:
- Reach younger, mobile first consumers
- Offer loyalty and offers inside the app ecosystem
- Reduce checkout friction when stored cards or balances are used
However, pure wallet only payments without UPI linkage are less central than they were a few years ago.
Buy Now Pay Later (BNPL)
BNPL has emerged as a niche but important method, especially in e commerce. A 2024 dataset on India’s online market indicates BNPL accounts for a low single digit share of e commerce payments, compared with much larger shares for UPI and cards.
BNPL is useful when:
- Customers want short term installment plans without traditional credit cards
- Merchants aim to lift conversion on higher priced items
The trade offs include regulatory scrutiny, the need for responsible underwriting, and potential disputes over refunds and chargebacks.
Cash On Delivery And Pay On Delivery
Cash on delivery is no longer the default, but it is still popular in segments where:
- Trust in online merchants is not yet strong
- Internet access or smartphone penetration is lower
- Customers want to inspect goods before paying
In many cases, COD is evolving into “pay on delivery”, where customers can pay by UPI or card at the doorstep. This reduces cash handling while preserving the perceived safety of paying after delivery.
How Consumers Choose Between Payment Methods
Indian customers do not think in technical rails. They choose methods based on perceived benefits.
Key drivers include:
- Speed and convenience (one tap UPI approval vs entering card details; saved credentials in apps or browsers)
- Trust and familiarity (long time card users may still default to card for bigger purchases; new to digital customers may prefer UPI due to strong brand recognition)
- Rewards and credit access (card rewards, BNPL installments, or cashback offersl bank or app specific loyalty programs)
- Risk perception (some customers see UPI as safer than sharing card details; others trust card networks and bank protections more)
Understanding your target segments and ticket sizes is critical before deciding which methods to prioritize.
How Merchants Should Evaluate Payment Methods In India
For merchants, the question is not “Which single method is best” but “What combination of methods maximizes revenue and minimizes friction for my audience”.
When assessing providers and payment methods in India, focus on:
- Coverage (UPI support, card schemes, net banking, wallets, BNPL; regional and bank coverage for UPI and bank payments)
- Pricing And Fees (MDR for cards; any provider fees for UPI and bank transfers; cross border and FX markups if you sell overseas)
- Performance (authorization and success rates per method; uptime, incident history, and routing intelligence)
- Settlement And Reconciliation (settlement cycles for each method; single vs multiple settlement accounts; quality of reporting and data exports)
- Risk And Compliance (chargeback handling for cards and BNPL; dispute workflows for UPI; support for domestic regulations and security standards)
- Integration And Maintenance (single API vs multiple connections; SDKs, plugins, and sandbox quality; local technical support)
To compare individual providers, merchants can consult resources such as the detailed overview of top payment gateways in India, which helps map features against specific business needs.
Building A Scalable Payment Strategy For India And Beyond
As digital adoption accelerates, merchants increasingly need a structured approach to payment strategy instead of ad hoc method additions.
Practical steps include:
- Mapping customer journeys and preferred methods by channel, such as mobile app, web, and point of sale
- Segmenting by ticket size and risk profile to decide where UPI, cards, or BNPL create the best balance of conversion and risk
- Monitoring method level KPIs, including checkout abandonment and payment success rates
- Planning for redundancies, such as multiple UPI or card acquiring options, to reduce dependency on a single provider
This is where bilixe can support a data driven approach. By using its directory and filters to compare providers across acceptance channels, supported methods, and commercial terms, merchants can design a payment stack that matches both present and future requirements. For merchants with regional ambitions, bilixe’s coverage of popular payment methods in Asia helps ensure that the Indian stack aligns with customer expectations in neighboring markets as well.
Conclusion
India’s payment landscape is now dominated by digital methods, with UPI at the center and cards, net banking, wallets, BNPL, and pay on delivery each serving specific roles. The most important insight for merchants is that there is no single “best” method in isolation. Instead, the right combination of payment methods in India depends on sector, customer profile, order value, and risk appetite.
