Archive · 20 Nov 2025
Digital Payments Surge 44% Among SMEs in India's Tier 2 & 3 Cities During Festive Season
During the festive season, small and medium businesses in India's smaller cities saw a big increase in digital payments.
This growth was driven by more people using their phones to pay, feeling confident about digital payments, and buying things like jewelry and groceries.
Even small shops did well despite competition from faster delivery services.
Digital payments value grew 44% YoY in Oct for SMEs
Tier 2 & 3 cities led the growth, with Tier 3 up 51%
Festive growth driven by volume, not discounts
Jewellery & grocery sectors saw significant increases
Kirana and supermarket merchants resilient against quick commerce
- Who
- Small and medium-sized enterprises in India
- What
- Experienced a 44% increase in digital payments value
- When
- During the festive season in October 2022
- Where
- Primarily in Tier 2 and Tier 3 cities
- Why
- Due to increased smartphone usage, consumer confidence, and demand for goods like jewelry and groceries
Growth in Smaller Cities
Metro City Growth
Payment Value Growth
Growth in Smaller Cities
Tier 2: 45%, Tier 3: 51%
Metro City Growth
Metros: 31%
- Total SME merchants analyzed
- Over 4 million
- Overall YoY transaction growth
- 42%
- Tier 3 cities payment value growth
- 51%
- Tier 2 cities payment value growth
- 45%
- Metro cities payment value growth
- 31%
- Growth in jewelry sector
- 66% YoY
- Growth in grocery sector
- 51% YoY