How Urban India Pays 2026: 88% Know Digital Credit, Only 31% Use It

Three in four urban Indians — 75% — have used at least one financial product inside a payment app: an investment, an insurance policy or credit. That is the headline of the How Urban India Pays 2026 report, published by Pahle India Foundation in collaboration with Amazon Pay and summarised on Amazon’s own newsroom on 13 October 2026. It surveyed 5,149 consumers and 1,089 merchants across 100 cities in 20 states.

Say the sponsorship out loud before the numbers, because it matters to how you read them. This is a survey co-produced by a company that sells payments, credit, insurance and investments inside one app, and one of its findings is that 52% of consumers would prefer a single app for payments, investments, insurance and credit. That is the conclusion most useful to its sponsor. Nothing here suggests the survey was run improperly or that any figure is false — we have no basis for either claim and make neither. It means the figures are a sponsored survey’s figures, we have not re-surveyed anyone, and they should be weighed as such.

With that said, the most interesting number in the report is the one that cuts against the sponsor. Urban India trusts its payment app to move money and does not trust it to lend money — and the report measures the distance precisely.

Respondents were asked to rate their payment app on three jobs, and the score falls off a cliff on the third.

The behaviour matches the sentiment. Awareness of digital credit runs at 88%; usage runs at 31%. That is a 57-point gap between knowing the product exists and being willing to take it — and it is a much wider gap than anything else in the report.

The report attributes the gap to fraud fear rather than to price or eligibility, and offers one number in support: 51.5% say they would borrow through their app if fraud protection were guaranteed, against 16.7% who say they would still decline. Read carefully, that is a conditional statement of intent, not a measured behaviour change; roughly a third of respondents fall into neither camp. Stated willingness in a survey is weak evidence of what people do when the money is real, and this page does not treat it as more than it is.

What the gap is not evidence of: that digital credit is unsafe. The report measures perception. A 3.10 out of 5 on credit tells you how respondents feel about borrowing in an app, not whether any particular lender, rate or collection practice is sound. Borrowing costs money, interest and fees are set by the lender, and nothing on this page is advice to take credit of any kind.

The report builds a Digital Credit Inclusion Index, and the metros come last. Tier-2 cities score 58.64, Tier-3 score 55.77 and Tier-1 scores 53.10, with Tier-2 usage higher than metro usage across every product measured.

The city-level numbers are sharper than the tier averages, and one of them is extraordinary. Coimbatore records 70% use of instalment financing for electronics and appliances, which the report describes as nearly ten times the national norm. If that framing is right, the national norm sits somewhere near 7% — the report’s summary does not state the national figure directly, so we are reading it back out of the multiple rather than quoting it, and it should be treated as approximate.

Amazon Pay’s own CEO is quoted in the same post saying 75% of its customers are in Tier-2 and Tier-3 cities, which is worth holding next to the Tier-2 finding rather than reading either in isolation.

Rent is the outlier and the reason is not mysterious: landlords, not merchants, are on the other side of it, and a sizeable share of Indian rent is paid to individuals without a merchant account or an incentive to leave a digital trail. The report records that cash accounts for 49% of rent payments but does not explain why, and neither will this page.

77% of respondents spend at least half as much again as usual during the festive season, and 6% spend more than triple. Fashion and beauty leads on how many people buy; consumer electronics and home appliances leads on how much they spend. Those two facts together explain why instalment financing shows up strongest on appliances and BNPL strongest on fashion — the first is where the big single tickets are, the second is where the frequent small ones are.

Spending more during a festival is not the same as saving more. A survey of what people spent cannot tell you whether they bought well, and the report does not claim it can.

This is the finding with the clearest policy edge in the whole report. 67.5% of gig workers use UPI Lite regularly. 23% say they would turn first to a digital loan app in a cash crunch — which the report puts at 3.4 times the national norm. 43% say digital credit has increased their financial independence.

And yet informal earners — gig workers, daily-wage workers, homemakers, students and the unemployed — score about 11 points below salaried and business respondents on the same Digital Credit Inclusion Index. The report attributes this to the difficulty of assessing irregular incomes through conventional underwriting.

Put plainly: the group most likely to reach for credit in an app is the group an app finds hardest to lend to. That is a structural observation the report makes about underwriting models, not an allegation about any lender, and no lender is named in connection with it.