Hyderabad tops India’s digital payments race, Ahmedabad still cash heavy: Report

India’s retail economy is undergoing a sharp transformation as digital transactions increasingly dominate consumer spending patterns. According to NeoGrowth’s 9th edition of its NeoInsights study, How India Pays, 74% of all retail spends across the country’s top 29 cities are now digital, up significantly from 45% just two years ago.

This means that out of every Rs 100 spent on retail purchases, Rs 74 is now being transacted through digital modes such as UPI, debit cards, and credit cards.

Hyderabad tops the list with 82% of retail transactions being digital, closely followed by Bengaluru and Pune at 79% each. Among non-metro cities, Visakhapatnam (76%), Nagpur (71%), and Chandigarh (68%) are leading the way in digital adoption, it notes.

In contrast, Ahmedabad records just 60% of transactions digitally, while Kolkata (55%), Jamshedpur (54%), Madurai (52%), and Rajkot (48%) continue to rely more heavily on cash.

Categories driving adoption

Digital payments are now entrenched across both discretionary and essential spending categories. Personal grooming (83%), education (81%), and dining (80%) top the charts for digital adoption. Even everyday needs like groceries (68%) and fuel (63%) are rapidly catching up, indicating that consumers are increasingly comfortable paying digitally for routine expenses.

The shift is also driven by retailers. Younger entrepreneurs in their 20s and 30s report that nearly 80% of their revenues now come from digital payments. Interestingly, seasoned retailers aged 50 and above are closing the gap quickly, with digital transactions in their outlets rising from around 40% two years ago to 68% today.

Smaller businesses, often considered slower to adopt technology, are also at the forefront—retailers with less than Rs 1 crore in turnover record 79% digital transactions, outpacing larger businesses, which stand at 63%.

The study, based on insights from over 21,000 MSME retail outlets across 29 cities covering Rs 35,000+ crore in annual revenue, underscores a structural change in how India pays. With India’s digital economy projected to contribute one-fifth of national income by 2030, these numbers signal that digital payments are no longer an urban luxury but an everyday norm shaping the future of consumption.