Since demonetisation and the launch of the Unified Payments Interface (UPI), merchant demand for digital payments has seen a 70 per cent Year-on-Year (YoY) growth, converged payment solutions company Razorpay said on Wednesday.

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According to the first edition of its "Era of Rising Fintech" report, non-cash transactions are likely to overtake cash transactions in the country by 2023.

Over 56 percent transactions were card-based which emerged as the mort preferred Person-to-Merchant (P2M) payment method.

"We saw that the Small and Medium Enterprises (SMEs) in Tier 1 and 2 cities are driving a solid growth of 75 per cent in non-cash transactions," said Harshil Mathur, Co-founder and CEO, Razorpay.

While credit card-based New Balance (NB) method secured 23.8 per cent of the total transactions recorded, the UPI method was used by 17 per cent users.

The report predicted that by 2020, 40 percent of digital payment transactions in the country will be driven by Tier 2 and 3 businesses and consumers, and 50 per cent of the Internet users would use digital payments.

Around 15 percent of India's GDP would also be flowing through digital payments by 2020, the report noted.