India's transition from a cash-centric economy to a digital payments landscape has been a 15-year journey, marked by significant milestones such as the introduction of the Unified Payments Interface (UPI) in 2016, which was further accelerated by the 2016 demonetization. According to the third annual Global Digital Shopping Index, a collaborative effort between PYMNTS Intelligence and Cybersource, India is one of six countries studied for its comprehensive shift to digital, emphasizing the impact of real-time, account-to-account transactions on the shopping experience.

The study reveals that 55% of retail purchases in India now prefer digital wallets as their primary payment method. Among digital wallet users, almost 80% opt for UPI, showcasing the popularity of this real-time payment system. The convenience and user-friendly nature of digital wallets and UPI contribute significantly to their preference among Indian consumers. Interestingly, the study highlights that 13% of Indian consumers prioritize the ability to pay with their preferred method, surpassing the average across all six countries in the study.

India's digital-first approach is notably prominent among millennials, bridge millennials, and Generation Z shoppers who use an average of 17 digital shopping and payment features, outpacing the U.S. (15 features) and the U.K. (12 features). Digital wallets are not only gaining traction in online retail but also in physical stores, with 70% of in-store shoppers in India using smartphones to enhance their shopping experience.

Recognizing this consumer preference, Indian merchants offer a range of digital shopping and payment features, averaging 28 features per merchant. Local merchants stand out for providing a seamless digital shopping experience, earning a Global Digital Shopping Index (GDSI) score of 120, surpassing all other countries studied except the UAE.

In conclusion, the PYMNTS study suggests that India's success in adopting digital payments and prioritizing digital-first shopping can serve as a global model for creating an inclusive payment and commerce culture in emerging markets, especially given the effective use of digital features by merchants to cater to the preferences of digitally savvy consumers, particularly the younger generations. India's transformation highlights the gradual displacement of cash by digital transactions, showcasing the nation's embrace of a more convenient and streamlined payment landscape.