Decoding the Unexplored Middle: A study on Digital Financial Services for the Emerging Middle Class

About This Report

Current market indicators in India suggest that conditions are increasingly favorable for the emergence and expansion of successful Digital Financial Services (DFS) ecosystems and that the country is expected to experience exponential growth in the DFS sector in the near term. Further, DFS has the potential to dramatically accelerate access to, and deepen the penetration of, formal financial services in India. 

This is particularly true for the Emerging Middle Class (EMC) that resides in less urban areas along the periphery of Tier 1 cities, referred to as Tier 2, 3, and 4 centers. 

Given their size as a population segment, shifting life goals and aspirations, and growing income levels, the EMC is also likely to play the role of catalyst in mainstreaming DFS adoption and usage. That said, service providers are still in the early stages of experimenting with different models, service offerings, and products to best meet the needs of specific market segments, which exhibit distinct attitudes, abilities, and behavior patterns. 

This report was commissioned by NetHope with a charitable contribution from Visa's Financial Inclusion Unit. Research for this study, both primary and secondary, was conducted by Deloitte Touche Tohmatsu India LLP. 


The aim of this report is to raise awareness in the market, and among merchant networks, of the Emerging Middle Class (EMC). Typical transaction behaviors of the EMC discussed in the report reveal the potential for reliable adoption and use of Digital Financial Services (DFS). It provides data-driven insights and recommendations using quantitative and qualitative collection methods that engaged 500 EMC consumers and 100 merchants across four different regions of the country. 

The insights and recommendations highlighted in this report are relevant for a variety of DFS providers and would be applicable to multiple aspects of their service offerings, including: business model evaluation, technology solution development, partnership planning, product features, and service ecosystem requirements. 

This report also provides a research foundation and strategic focus for NetHope's recently launched India “Accelerator for Consumer Capacity in Electronic Payment Transactions” (ACCEPT) program. In conjunction with Visa, NetHope aims to create, jump start, or accelerate the delivery of DFS offerings to market segments such as the EMC in Tier 2, 3, and 4 centers that would not otherwise receive the same level of commercial attention.

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