Share of online spending in Cat C+ cities soared from 53% to 73% across apparel and travel, as well as digital services like gaming and online education
FinTech BizNews Service
Mumbai, January 15, 2024: India’s digital payments landscape is seeing a remarkable surge with non-
metro cities, particularly Cat B and Cat C+, emerging as significant growth engines. A new whitepaper
from Visa, the global leader in digital payments, called ‘Bridging the Gap: Payments in India Beyond
Metros’ reveals that digital payment transactions in non-metro regions are growing faster than in
metros, with card spending soaring 175% since 2019.
This study by Visa Consulting & Analytics (VCA), Visa’s advisory arm, showcases growth trends in non-
metro cities, fuelled by evolving consumer segments and improved digital infrastructure across the
country. The whitepaper, based on insights from Visa’s data, dives into three categories: Cat A – metros
like Bengaluru, Delhi, Mumbai and cities like Pune and Ahmedabad; Cat B – rapidly growing cities and
districts such as Trichy, Bhubaneswar and Jaipur; and Cat C+ – emerging cities and districts like Tirupur
(Tamil Nadu), Sangli (Maharashtra), and Tumkur (Karnataka).
Sushmit Nath, Head of Visa Consulting & Analytics, India & South Asia said, “In India’s rapidly evolving
digital payments ecosystem, non-metro cities are the emerging vibrant hubs of opportunity and
aspiration, driven by speedy digital adoption. As their ambitions evolve, these consumers seek tailored,
flexible, and secure financial solutions. With its global experience and deep data expertise, Visa
Consulting and Analytics (VCA) is ideally positioned to enable financial institutions to better serve these
segments. At Visa, we are committed to supporting the country’s progress by driving innovation in
payments that meet the needs of consumers beyond the metros.”
Key Growth Drivers: Rising Income, E-Commerce and Digital Connectivity
The surge in digital payments in non-metro regions is fuelled by rising income levels, the rapid growth of
e-commerce, and enhanced digital connectivity, supported by empowering Government initiatives like
the Pradhan Mantri Jan Dhan Yojna (PMJDY), Digital India Program and Goods & Services Tax (GST).
Visa’s data shows a remarkable 4X increase in Cat C+ consumers who spend over ₹2 lakh annually on a
single card (vis-à-vis 2019) —significantly higher than the 1.4X increase observed in Cat A cities. The
expansion of e-commerce is key to this growth; the share of online spending in Cat C+ cities jumped
from 53% to 73%, with notable increases in discretionary spending across categories like apparel and
travel. Moreover, there is a marked increase in consumption of digital services in non-metro cities,
where online gaming spends rose by 16X and spends on digital content increased by 9X during the same
period.
Transformative Opportunity to Unlock Financial Inclusion
Formal credit penetration in Cat B+ cities was only 10.5% in 2019, compared to 42.4% in metropolitan
regions 1 . Though consumers in Cat B and Cat C+ cities have access to formal credit channels, they tend
to depend more on informal credit sources, such as moneylenders or family loans due to limited credit
history. Here lies a massive opportunity for lenders and businesses to innovate tailored credit products
for this growing customer base.
Tailored Financial Solutions for Emerging Needs
Consumers in Cat B and C+ cities are increasingly seeking bespoke, flexible, and inclusive products that
address their specific needs, including dynamic pricing, flexible tenures, and transparent, low-cost
options. To capitalise on this growing demand, Visa has identified four key pillars for success:
● Affordability: With growing consumption, consumer preference for flexible repayment options
too has increased.
● Aspiration: These consumers seek financial products that offer rewards, loyalty programs,
benefits and access to exclusive experiences that enhance their lifestyles.
● Convenience: New-to-digital consumers prefer financial products that are simple, user-friendly
and support multiple languages.
● Trust: Consumers also prefer digital payment methods that are trusted, highly secure and have a
robust redressal mechanism.
As India’s economy becomes increasingly digitised, Visa’s payment solutions can unlock new growth
opportunities for businesses and consumers alike. Visa offers compelling solutions, coupled with best-in-
class security, reliability, scale, and reach, enabling millions to realise their financial potential.
Methodology:
● Insights in this report are derived through Visa Consulting & Analytics’ expertise in payments
strategy, data science, and economic analysis by leveraging credit card and debit card spending
data.
● City categories based on Visa transaction data:
● Cat A cities - Bengaluru, Delhi, Mumbai, Hyderabad, Chennai, Kolkata, Pune, Gurugram,
Ahmedabad & Gandhinagar
● Cat B cities and districts - Trichy, Jamnagar, Ambala, Khordha, Malappuram, East
Godavari, Jabalpur, Erode, Rohtak, Medak, Howrah, Anand, Palakkad, Muzaffarpur,
Nizamabad, Kollam, Bhavnagar, Goa, Karimnagar, Rewari, Cuddapah, Jamshedpur,
Moradabad, Solapur, Mangalore, Ahmednagar, Kannur, Hooghly, Ajmer, Surat, Jaipur,
Visakhapatnam, Coimbatore, Lucknow, Indore, Baroda, Chandigarh, Ghaziabad,
Ernakulam, Faridabad, Ludhiana, Guntur, Rajkot, Vijayawada, Patna, Bhopal, Kanpur,
Raipur, Thrissur, Bhubaneswar, Meerut, Varanasi, Kozhikode, Karimnagar, Karnal,
Pondicherry, Kurnool, Vellore, Patiala, Nalgonda, Udaipur, Ranga Reddy, Khammam,
Guwahati, Gwalior, Kota, Allahabad, Cuttack, Tiruvallur, Bareilly, Gorakhpur, Kolhapur,
Hisar, Mohali, Gautam Buddha Nagar, Panipat, Kakinada, Jammu, Kottayam,
Rajahmundry, Warangal, Nasik, Nagpur, Aurangabad, Mysore, Amritsar, Jodhpur,
Nellore, Madurai, Kanchipuram, Salem, Dehradun, Thiruvananthapuram, Agra, Chittoor,
Jalandhar, Ranchi
● Cat C cities and districts – Cities beyond those listed above, including Tirupur, Sangli,
Junagadh, Tumkur, and others.
