Are Emerging Cities Boosting Digital Payment Values for SMEs by 44%?
Synopsis
Discover how Tier 2 and Tier 3 cities are leading a remarkable 44% surge in digital payment values for SMEs during the festive season. A new report reveals the significant growth in transactions and spending habits across various sectors, highlighting a shift in consumer confidence and digital payment adoption in non-metro regions.
Key Takeaways
44% growth in digital payments among SMEs in October.
Tier 3 cities led with a 51% increase in payment values.
Watches and Jewelry sector saw a 66% surge in digital payments.
Kirana and supermarket sectors showed resilience with 51% growth .
Strong consumer confidence indicated by increased discretionary spending.
New Delhi, Nov 20 (NationPress) The value of digital payments surged by 44 percent in October year-on-year among small and mid-sized enterprises, fueled by a festive boom in Tier 2 and Tier 3 cities across India, according to a recent report released on Thursday.
The analysis by Mintoak, a merchant SaaS fintech platform, evaluated data from over 4 million SME merchants within its network, revealing a 42 percent increase in the number of transactions year-on-year.
Leading the growth, Tier 3 cities exhibited an impressive 51 percent rise in digital payment values and a 49 percent increase in transactions, with notable contributions from the watches and jewelry sector (up 77 percent) and grocery stores (up 59 percent).
The festive growth trend was driven by volume, indicating a surge in customer visits and repeated digital engagement rather than just discount-driven increases.
According to the report, Tier 2 and Tier 3 markets consistently outperformed metropolitan areas across most categories, highlighting enhanced smartphone accessibility, increased consumer confidence, and a growing acceptance of digital payments beyond major urban centers.
Tier 2 cities saw a 45 percent growth in payment value, with discretionary spending on jewelry (up 64 percent) and supermarkets (up 46 percent) showing significant increases. In contrast, Tier 1 cities experienced stable yet modest growth at 31 percent.
In a surprising twist, Kirana and supermarket merchants demonstrated resilience against the rise of quick commerce, with grocery payment values up 51 percent and transactions escalating by 50 percent.
The analysis concluded that the Watches and Jewelry sector enjoyed the largest growth, with digital payment values soaring by 66 percent year-on-year. Despite rising gold prices, the demand persisted, indicating a boost in disposable income and aspirational spending among consumers in non-metro areas.
“Increased transaction frequency and sustained discretionary spending on items such as jewelry in smaller cities signify genuine confidence at the grassroots level,” stated Raman Khanduja, CEO and Co-founder of Mintoak.
Point of View
It's clear that the growth seen in digital payments among SMEs, particularly in Tier 2 and Tier 3 cities, reflects a significant shift in consumer behavior and confidence. This trend not only elevates small businesses but also indicates a promising future for digital transactions in India, where technology is becoming a cornerstone of economic growth.
NationPress
9 May 2026
Frequently Asked Questions
What factors contributed to the growth in digital payments?
The growth in digital payments can be attributed to increased smartphone penetration, higher consumer confidence, and a preference for digital transactions in smaller cities.
Which sectors saw the most significant increase in digital payment values?
The Watches and Jewelry sector experienced the highest growth, with digital payment values increasing by 66 percent year-on-year, along with notable rises in grocery stores and supermarkets.
How do Tier 2 and Tier 3 cities differ from Tier 1 cities in terms of digital payment growth?
Tier 2 and Tier 3 cities outperformed Tier 1 cities in digital payment growth, showcasing stronger increases in transaction frequency and discretionary spending on various categories.
