Digital Payments Hit 45.6% of Indian Households, Reveals SBI Report
A new SBI report reveals that nearly 46% of Indian households use digital payments, highlighting a sharp divide between income groups and spending habits.
India is witnessing a steady shift in how its citizens spend, with Indian households digital payments now reaching nearly half the population. According to a comprehensive research report by the State Bank of India (SBI), approximately 45.6 per cent of households in the country now utilize online shopping and digital payment channels to purchase at least one consumption item.
While the growth indicates a digital transformation in spending habits, the report also points out a significant gap, noting that 54.4 per cent of households still rely entirely on traditional payment methods for their purchases.
Spending Patterns: Where is the Digital Shift Happening?
The adoption of digital payments is not uniform across all spending categories. The SBI report breaks down the trends into three primary segments: consumables and services, durable goods, and food.
Consumables and Services
This category leads the digital charge, accounting for 39.68 per cent of online purchases. Within this segment, general services dominate with a 37.93 per cent share, followed by fuel and light at 15.96 per cent. Interestingly, essential services like medical care and education remain largely offline, with digital adoption sitting at only 1.69 per cent and 1.83 per cent, respectively.
Durable Goods
Durable goods account for 23.3 per cent of digital transactions. Fashion is the primary driver here, with clothing leading at 19.97 per cent and footwear following at 12.05 per cent. However, high-ticket items are rarely bought digitally; furniture and fixtures stand at a mere 0.18 per cent, while medical equipment is at 0.32 per cent.
The Food Paradox
Despite food accounting for roughly 32.82 per cent of total household consumption expenditure, digital adoption in this sector remains strikingly low at just 7.10 per cent. The report highlights that basic consumption needs are still heavily tied to offline markets.
- Routine Groceries: 4.29 per cent (Highest in food category)
- Served Processed Food: 2.6 per cent
- Packed Processed Food: 1.65 per cent
- Vegetables: 1.32 per cent
- Fresh Fruits: 1 per cent
- Eggs, Fish, and Meat: 0.59 per cent
The Income Divide and Regional Trends
One of the most striking revelations of the SBI report is the "consumption gradient" based on income. Digital adoption scales sharply with the Monthly Per Capita Consumption Expenditure (MPCE).
The bottom 20 per cent of households show a digital adoption rate of 25.3 per cent, whereas the top 20 per cent soar to 69.5 per cent. This creates a massive 44.3 percentage-point gap between the wealthiest and poorest quintiles.
Geographically, Haryana has emerged as the leader in average monthly consumption expenditure across food, consumables, services, and durable goods. Other states showing strong trends in major consumption categories include Goa, Nagaland, and Kerala.
Digital Adoption Linked to Higher Spending
The report suggests that the move toward digital channels is not just a change in method, but a sign of higher spending power. Households that have adopted digital payment channels exhibit a 7.5 per cent higher MPCE compared to those who stick to traditional methods.
"The results highlight that digital adoption is linked with higher consumption intensity and a shift towards diversified consumption patterns," the SBI research report stated.