The next edge in Indian retail is not how you pay, but who you partner with

For much of Indian retail’s growth story, payments were treated as a background function. They needed to work reliably, cheaply, and at scale, but rarely demanded strategic attention. That thinking no longer holds. Today, payments sit firmly at the heart of the customer experience, influencing whether a transaction is completed, a brand is trusted, or a customer returns. 

In an environment where consumers compare prices in seconds, abandon carts at the first sign of friction, and expect instant refunds and seamless support, payments are no longer just about how money moves. They are about how confidence is built, how loyalty is earned, and how growth is sustained. This shift is forcing retailers to rethink not only their technological choices, but also how they engage with banks, fintechs, and payment providers. 

From payment methods to payment ecosystems 

Indian retailers operate in one of the world’s most complex payment landscapes. Though UPI has transformed everyday commerce and redefined expectations of speed and simplicity, cards remain critical across segments, particularly for higher value transactions. At the same time, wallets and buy now pay later options are becoming increasingly relevant across online and omnichannel retail. Managing this diversity is no longer simply a question of integration. It is a question of orchestration. 

Global evidence shows that the most successful retailers are now looking to move away from transactional vendor relationships and towards deeper, outcome driven partnerships. Rather than asking payment providers to simply process transactions, they are actively looking to co-design checkout journeys, refund experiences, fraud controls, and data flows, which align with how customers actually shop and pay. This distinction matters. Vendors execute instructions. Partners help shape solutions. 

Retail leaders that collaborate closely with banks, gateways, wallets, and fintechs are better positioned to deliver what today’s consumers expect, which is seamless checkouts, faster dispute 

resolution, safer transactions, and increasingly personalised experiences. For these retailers, payments are not just a cost line in the P&L; they are an extension of the brand promise and a visible part of the overall customer journey. 

The data behind the shift 

KPMG International’s latest report, ‘Partnering for Payment Modernisation: How leading banks and retailers are unlocking the future of payments’, highlights a clear divide between leaders and laggards in the retail payments ecosystem. While 53% of retailers say their banking partners understand their payment modernisation goals, the leaders go several steps further. They co-create solutions rather than simply consume products. They share data instead of operating in silos. And they align incentives around customer outcomes such as approval rates, refund turnaround times, and fraud reduction, rather than focussing only on transaction volumes. 

This difference in approach delivers tangible results. The report also shows that retailers classified as payment leaders report up to four times more business benefits from payment modernisation than those at early stages. These benefits extend well beyond operational efficiency to include faster transaction processing, higher approval rates, lower cart abandonment, improved customer loyalty, and stronger competitive positioning. 

The message is clear. Payment maturity is no longer defined by how many payment methods a retailer supports, but by how well those methods work together to deliver a cohesive and reliable experience. 

Why this matters even more for India 

India’s scale magnifies both opportunity and risk. Even minor payment failures can disrupt millions of transactions, while poor refund experiences can erode trust just as quickly. At the same time, Indian consumers have embraced digital payments at unprecedented speed, setting a high bar for convenience, transparency, and reliability. 

In this environment, payments can no longer be treated as someone else’s problem. Retailers, banks, and fintechs must understand each other’s realities, from peak demand and omnichannel fulfilment to high volumes and thin margins. Those that pull ahead will be retailers who actively shape how payment solutions are designed and deployed, working closely with partners to deliver resilience, strong yet invisible fraud controls, and frictionless experiences. 

What retail leaders should do differently 

Retail leaders must bring payment partners into strategic discussions early, alongside customer experience, digital transformation, and growth. Payments cannot be added after new channels or business models are defined. With time even metrics must also evolve. Focussing just on uptime or cost misses what matters most. Leaders should certainly align with partners on outcomes such as higher conversion, fewer failed transactions, faster refunds, and quicker issue resolution. Above all, payments must be recognised as critical experience infrastructure, shaping brand perception and customer trust, much like logistics or customer service. 

Indian retail’s growth depends on trusted, convenient, and consistent experiences at every touchpoint including payments. The winners will be those with strong partnerships and seamless payment systems that enhance customer satisfaction. 

(The author is Global Head of Digital and Technology Transformation for Retail at KPMG International and Sector Head for Retail at KPMG in India. Views are personal.)