New Delhi [India], October 13 : Three in four urban Indians, or 75 per cent, have used at least one financial product through their primary payment application, according to the How Urban India Pays Report 2026 released by Pahlé India Foundation in collaboration with Amazon Pay.
The report revealed that while digital payments have turned into a daily routine led by Unified Payments Interface (UPI), a distinct divide remains between payment confidence and credit adoption. Although awareness of digital credit stands at 88 per cent, actual usage remains low at 31 per cent.
The study introduces the Digital Credit Inclusion Index (DCII) 2026. India secures an overall score of 55.85 out of 100, placing the nation in the "Emerging & Served" category. Among its three core pillars, Access scores 61.24, Adoption reaches 57.17, and Impact lags at 49.16.
This shortfall in impact stems directly from trust issues. While users rate payment applications 4.11 out of 5 for security and 3.98 for payments, trust levels fall to 3.10 when the platform provides credit. However, 51.5 per cent of respondents state that they would borrow through their application if fraud protection were guaranteed, compared to 16.7 per cent who would still decline.
Rajiv Kumar, Chairman of Pahlé India Foundation, noted that the digital payments expansion represents a critical development milestone.
"In less than a decade, UPI has moved from novelty to reflex, and urban India now pays digitally as a matter of habit," Kumar stated.
"Having built this foundation of trust-based efficiency at scale, India is now ready for its next leap: extending the confidence earned in payments to borrowing, saving and investing," he added.
Kumar observed that transparent disclosure, robust cybersecurity, and underwriting systems tailored for informal incomes will help digital finance reach more citizens and contribute toward the Viksit Bharat at 2047 objective.
The report also highlighted that Tier-2 cities outpace metropolitan centres as the primary engine for credit uptake. Tier-2 locations lead in Buy Now Pay Later (BNPL) at 60 per cent and credit applications at 41 per cent, recording a DCII score of 58.64, which is higher than Tier-1 at 53.10 and Tier-3 at 55.77.
Vikas Bansal, Chief Executive Officer of Amazon Pay India, pointed out that urban consumers are relying on digital credit to manage routine expenses.
"Consumers are increasingly turning to BNPL and EMI options not just for big-ticket purchases, but as practical tools to spread costs, stay within budget and make aspirational purchases more accessible," Bansal said.
"At Amazon Pay, we see this shift first-hand, with 75% of our customers in Tier-2 and Tier-3 cities," he added.
Bansal stated that the primary objective centres on keeping credit simple, transparent, and relevant so consumers can plan budgets and fulfill requirements with certainty.
Across merchants, 80.6 per cent express openness to digital payments, though 72.1 per cent of hesitant sellers point to settlement delays as their primary challenge.