A decade ago, most Indian consumers approached digital payments with hesitation. Online shopping was largely anchored in cash on delivery, offering reassurance to users still unsure about trusting the internet with their money. Over time, however, e-commerce has fundamentally transformed this relationship with finance.
As platforms introduced multiple payment options — including UPI, digital wallets, debit cards and Buy Now, Pay Later (BNPL) — consumers began to view digital payments not as a risk, but as a convenience. What started as a smoother checkout experience gradually evolved into something more significant: broader access to formal financial tools.
By allowing users to move seamlessly from small wallet payments to credit-based purchases, shopping platforms helped millions of Indians grow comfortable with a wide range of financial products. Digital payments have now moved from being an alternative to becoming the default mode of transaction.
Recent industry data reflects this shift. Retail digital transaction volumes rose 35% in FY25, while nearly 90% of consumers now prefer digital payments for online purchases.
These findings come from the How Urban India Pays 2025 report by Kearney and Amazon Pay, based on a survey of over 6,000 consumers across 120 cities. The study highlights how habits formed online are now shaping behaviour offline. It also identifies e-commerce as a key driver of credit adoption, especially through co-branded credit cards, which have evolved from niche offerings into mass-market products. Around 65% of co-branded cardholders now own a card linked directly to an e-commerce platform.
The launchpad for credit adoption
This comfort with digital payments has paved the way for a deeper shift: the mainstream acceptance of formal credit.
By embedding financial products directly into shopping platforms, e-commerce companies removed much of the anxiety traditionally associated with borrowing. For younger consumers in particular, credit is no longer viewed as risky but as a practical financial tool.
The report shows that 65% of young professionals applied for a credit card soon after starting their first job. Rather than using credit purely for indulgence, many see it as a planning mechanism: 43% use credit instruments for financial flexibility and long-term management.
“Gen Z and Millennials are redefining credit adoption in India,” says Shashwat Sharma, Partner and Financial Services Lead at Kearney India. “Sixty-five per cent of respondents applied for their first credit card early in their careers. The next opportunity lies in building trust, personalisation and more inclusive financial products.”
Fueling the lifestyle economy
As users move from basic digital payments to credit-led spending, consumption patterns are also evolving.
While cash and UPI still dominate low-value daily purchases, credit instruments are increasingly used for aspirational and high-ticket categories. The report finds that:
- 19% of respondents use credit for electronics purchases
- A significant share rely on credit for fashion and lifestyle spending
- 13% use credit for hobbies and travel-related expenses
The flexibility of splitting payments and earning rewards has made digital platforms central to urban lifestyle spending.
Trust now extending offline
One of the most notable outcomes of this shift is how online trust is now influencing offline behaviour. Consumers who grow comfortable using wallets or co-branded cards on apps are increasingly using the same tools at physical stores.
The report notes that preference for digital payments in offline purchases rose from 48% in 2024 to 56% in 2025 — a significant year-on-year jump.
According to Vikas Bansal, CEO of Amazon Pay India, this signals a maturing ecosystem. “The rise in digital payment preference for offline transactions reflects a fundamental shift in consumer behaviour. The growing adoption of co-branded credit cards and the strong preference for digital utility bill payments — now at 87% — show that India’s digital payments ecosystem is coming of age.”
A financial transformation driven by e-commerce
What began as simple online convenience has evolved into a broader financial education for urban India. By offering a trusted environment to experiment with wallets, UPI and credit, e-commerce platforms have played a quiet but powerful role in shaping how consumers manage, use and understand money.
In effect, online shopping hasn’t just changed how Indians buy — it has changed how they think about finance.
