Diwali sales over the last few years have turned out to be huge hits on e-commerce platforms. Starting from refrigerators to clothes everything gets sold at a difficult to get bargain prices, so much so that we are getting to see which platform is outforming whom even in the mainstream media.

If media narrative is to be believed, with the rising ease in using digital payment apps and interfaces, the tendency to pay digitally is trumping cash payments during the festive seasons on such retail platforms. A little dated survey by Euromoney says cash transactions in the total consumer spending in India was down to 68 per cent in 2017 from 78 per cent in 2015. And there is no evidence that it has abated.

This trend is understandable in view of the rising penetration of smartphones and increasing sophistication of payment apps along with the willingness of more and more merchants to embrace the digital payment route. If sellers are willing and buyers find it convenient, the payment route will invariably be the one that both the parties prefer.

It is therefore no wonder that with more than 300 million smartphone users in the market, digital payment apps are finding easy homes to nest. All the predictive studies are also in agreement. A Boston Consulting Group (BCG) study predicts that Indian digital payment industry is likely to touch $500 billion by 2020, contributing 15 per cent to our GDP.

What, however, is of greater interest is the prediction that it is going to be dominated by micro transactions with around 50 per cent being in the category of less than Rs 100. According to a Hindu Business Line report (February 26, 2019), Indian e-commerce is poised to grow to about $1.2 trillion by 2021. The current growth rate is estimated at a CAGR of 32 per cent. And the mobile wallets are seen as an important contributing factor.

The statistics are indicative of a huge growth both in e-commerce and the use of digital payment platforms. However, we should remember that India is a very late entrant to the electronic payment systems. Banking has yet to reach out to the last mile which is a crucial link to the saturated transaction possibility of a cashless economy. Be that as it may, three trends are easily discernible, a) e-commerce is growing and catching up fast, b) digital transaction is also catching up fast, c) there is therefore a rise also in cashless transactions.

We can therefore safely say that India is fast catching up and moving towards an economy where people accept cashless transaction also as a part of life. With e-commerce platforms pushing for digital and electronic payment, emergence of platforms facilitating cross wallet transactions, even in small shops, sensing the ease of digital transactions, acceptance of electronic and digital mode in payment for transactions is on the rise. However, it’s as yet difficult to predict whether India will ever be Sweden where cash transaction has fallen to one percent of the total transaction in the economy.