Non-metro cities are fast emerging as the powerhouses of India’s digital payments revolution. A new report from Visa, “Bridging the Gap: Payments in India Beyond Metros,” highlights a dramatic 175% growth in card spends across Cat B and Cat C+ cities since 2019, far outpacing the 1.4X growth recorded in metros.
The whitepaper by Visa Consulting & Analytics (VCA) explores this trend, showing how rising incomes, e-commerce expansion, and improved digital infrastructure have transformed smaller cities into thriving centres for digital transactions.
Non-Metros Take the Lead in Digital Growth
The report categorises cities into three tiers:
- Cat A: Metros like Mumbai, Delhi, and Bengaluru.
- Cat B: Rapidly growing cities like Jaipur, Trichy, and Bhubaneswar.
- Cat C+: Emerging hubs such as Sangli, Tumkur, and Tirupur.
Cat C+ cities led the charge, with their share of online spending growing from 53% in 2019 to an impressive 73% in 2024. Key categories like apparel, travel, and digital services, including gaming and online education, have driven this shift.
Sushmit Nath, Head of Visa Consulting & Analytics, India & South Asia, commented, “Non-metro cities are now vibrant hubs of digital adoption and aspiration. Consumers in these areas are looking for secure, tailored financial solutions. At Visa, we’re committed to enabling this transformation by providing innovative payment solutions and deep data-driven insights.”
Key Growth Drivers
- Rising Income Levels: A new wave of affluent consumers in smaller cities is fuelling discretionary spending.
- E-commerce Expansion: Online retail has flourished, with non-metro consumers increasingly embracing digital shopping.
- Improved Connectivity: Initiatives like the Digital India programme and GST reforms have strengthened digital infrastructure.
Visa’s data reveals that the number of Cat C+ consumers spending over ₹2 lakh annually on a single card has increased by 4X since 2019, compared to a 1.4X rise in metros. Online gaming in these regions saw a staggering 16X rise in spending, while digital content consumption increased by 9X.
Addressing Gaps in Financial Inclusion
Despite this growth, challenges remain. Formal credit penetration in Cat B and Cat C+ cities stood at just 10.5% in 2019 compared to 42.4% in metros. Consumers in these regions often rely on informal credit sources due to limited credit histories.
Visa sees this as an opportunity for financial institutions to innovate with tailored products. Four pillars of success were identified:
- Affordability: Flexible repayment options for growing consumer needs.
- Aspiration: Rewards and loyalty programmes to match evolving lifestyles.
- Convenience: Simple, multilingual financial tools for new-to-digital users.
- Trust: Secure payment methods with strong redressal systems.
The Road Ahead
Visa’s report underscores the untapped potential in non-metros and reaffirms the company’s role in shaping a more inclusive financial ecosystem. By enabling secure and reliable payment solutions, Visa is empowering millions of consumers and businesses to thrive in a rapidly digitising economy.
For the full report, visit Visa.com.
