Top payment trends from Tier 2 and Tier 3 cities in India

Top payment trends from Tier 2 and Tier 3 cities in India

Shanker, a grocery shop owner in Surat no longer keeps multiple small denomination notes in his shop. He encourages customers visiting his store to scan and pay using the QR code in his outlet. In Meerut, Mahinder who runs a pan shop is doing brisk business. Customers who frequent his shop these days insist on paying using a payment app.

Digital payments have seen massive growth in India over the last 3 years. In an interesting shift, this growth is no longer confined to the country’s top metros. This next phase of growth is being driven by over 500 million Indians residing in ‘Bharat’ where smartphone penetration, cheaper data, intuitive & simple app design and more local language context are propelling the move towards the adoption of digital payments.

PhonePe is one of India’s largest payments platforms with more than 8 million merchants across 215 cities — over 55% of our transactions come from Tier 2 and 3 cities.

Cities in focus: Mysore and Vizag

Mysore and Vizag have been front runners when it comes to the adoption of digital payments across Tier 2 and Tier 3 cities.

Here are some top trends from Mysore:

1. PhonePe has seen a 227% Year on Year growth in customers from Mysore. From recharges to sending money with UPI to buying Gold and paying at their local grocery stores, Mysore users have taken the lead on paying digitally.
2. A whopping 85% of Mysore’s smartphone users are also PhonePe customers.
3. Over 60% of the city’s merchant base accepts PhonePe.

Here’s what one of our merchant partner Nagbhushan.A.R. from the Mahalakshmi Sweets in Mysore has to say, “We have been live with PhonePe for more than 6 months and it has been a smooth experience. The hassle of cash handling has been greatly reduced with PhonePe and the team on the ground has also been helpful and quick in solving any kind of queries we have put forward.”

Here’s how Vizag is transacting digitally:

1. PhonePe has seen a 175% Year on Year growth in customers from Vizag. Besides sending money, recharges and buying Gold, customers in Vizag also use PhonePe for making hotel bookings and food purchases via PhonePe Switch.
2. Smartphone users in Vizag love using the PhonePe app! An overwhelming 87% of Vizag’s smartphone users are also PhonePe customers.
3. Over 75% of a city’s merchant base accepts PhonePe.

Here’s what our merchant partners from Vizag have to say:

Kishore Setti from Gowri Camera World, ”PhonePe has helped me to go cashless and make quick hassle-free & quick transactions with UPI. I am able to save a lot of time which was earlier spent in visiting banks. I also feel proud to see my store listed online and accessible to all PhonePe users helping us improve our walk-ins.”

Ravi Chocharia from Raj trading says, ”The store listing and visibility on PhonePe is a really great opportunity for SMEs like us where we can customize our offers and promote them free of cost. I am really happy to be part of the PhonePe family. ”

Digital payments in India are at an inflection point. Increased awareness, convenience and reliability have made Tier-2 and Tier-3 consumers a lot more receptive to digital payments modes. To super-charge the next phase, PhonePe will continue building solutions that can solve for ‘Bharat’ and not just India.