Payment methods in India

Given that it is rather unlikely that you will be creating a specifically Indian version of your website, than the complexities of local payment infrastructure are less relevant than in most markets. However, making an existing website intended for cross-border purchases by Indians more sympathetic to their preferred payment methods will certainly drive sales.

ata on preferred payment methods stated by different sources are exceptionally contradictory, probably due to the fairly rapid pace of change. The general thrust of the data is that cash-on-delivery is the preferred method, followed by card, with rapid growth in mobile payments (Figure 24):


Credit card penetration is low, with only around 20M in circulation. Debit card penetration is much higher and growing quite quickly, by 9% in 2014 to reach 431M issued, and these are often co-branded for Visa or Mastercard. In practice, such cards may not be fully enabled for cross-border purchases.

Cash on delivery

Although extremely unfamiliar if you are operating ecommerce in most western countries, cash on delivery is still the preferred payment method in many places, and India is one such.

Because it is so standard, it is typically offered by the larger parcel-delivery companies as a value-added service. It isn’t cheap: in India it generally costs around 2-4% in merchant fees to the handling parcel-carrier. Moreover there is still the considerable risk of expensively sending the goods, only for the buyer to decline to pay “on the doorstep”.

Nevertheless if you decide to ship cross-border, it is worth exploring if your parcels partner can support this option, and evaluating the associated costs and risks. Note that shipments of goods worth more than USD $2000 which are not paid for via a controlled payment gateway (i.e. are paid in cash) is not permitted.

Wallets and Mobile Payents

A Unified Payment Interface (UPI) system for making mobile payments online has been developed by 29 Indian banks, and was launched in August 2016. It is expected to prove extremely popular, and also to render other eWallet solutions (such as Paypal) rather irrelevant in India.

At the time of writing, take-up data was not available, but offering compatibility with it is certainly likely to be worth exploring, and will strongly signal to prospective Indian consumers your interest in selling to them.


Informal guidance from the big marketplaces suggests that Indian shoppers generally expect to pay a little more to access western brands than these brands would sell for in their home markets. A premium of up to 35% is considered tolerable; this is not inconsistent with likely additional shipping and customs/duty costs.


• Cash on delivery remains the preferred method of payment

• Credit card penetration is very low, even amongst your likely affluent target customers. Debit card penetration is higher, although its usability for cross-border transactions is variable

• Mobile payment are predicted to gain rapid traction in India, given the unified UPI scheme recently rolled out by India’s top 29 banks. It may be worth exploring how you could offer this




India's demographics

India's retail landscape

Connectivity and internet usage in India

Marketing in India

India's legal framework

Logistics in India