msmes-embracing-digital-payments

The digital mode of payments has penetrated small businesses across semi-urban and rural India, with smartphones encouraging its use, says a nationwide survey report.

According to the MSME Digital Index Report by PayNearby, which conducted the survey among 10,000 individuals and micro, small, and medium enterprises (MSMEs) in retail-focused segments including ‘kirana’ (grocery) stores, mobile recharge outlets, medical shops, customer service points (CSPs), and travel agencies, at least 48 per cent of MSMEs preferred UPI as the mode of payments, followed by 39 per cent opting for Aadhaar-enabled banking.

 

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Among women entrepreneurs, Aadhaar banking saw an even higher preference at 42 per cent, reflecting increasing trust in secure, tech-enabled services such as fingerprint and face authentication, the report added.

With smartphones’ prices dropping and locally-made smartphones making access to technology easier, they have emerged as the primary business devices at 71 per cent. Among women, they were even higher at 84 per cent.

At least 73 per cent small businesses said they saw an increase in income or improved operational efficiency from adopting digital tools, while a third of the respondents cited definite improved operational efficiency.

A small per cent – 7 per cent respondents – have also adopted AI-powered tools to expand their businesses. 

“A small but notable 7 per cent of respondents have begun exploring automated or AI-powered tools, including inventory apps, automated billing systems, and customer engagement platforms, mostly through third-party solutions,” the report said.

Anand Kumar Bajaj, Founder, MD & CEO, PayNearby, said, “The MSME sector is the backbone of Bharat's economy, and the rapid adoption of digital tools such as smartphones, UPI, Aadhaar-enabled banking, and emerging AI workflows is proof that this segment is embracing modernisation.”

 

PayNearby, a DPIIT-certified company, is a branchless banking and digital network.