According to PayNearby's MSME Digital Index Report 2026, UPI and Aadhaar-enabled banking account for 61 per cent of transactions at semi-urban and rural MSME retail stores, while 71 per cent of retailers use AI tools to improve daily business operations. The report states that 87 per cent of respondents feel more confident using digital tools than last year, and 82 per cent are comfortable using them for daily business activities. Additionally, 80 per cent reported increased digital payment usage at their stores over the past year. Regarding AI, 90 per cent of respondents have heard of AI, while 71 per cent have used AI tools to automate and improve business operations, though 26 per cent remain unsure about which AI features could best support their businesses. Cash remains the single largest dominant customer transaction mode at 37%, while Aadhaar banking and UPI together account for 61% of the reported dominant transaction mix. Cash withdrawal emerged as the leading service at 51 per cent, followed by Aadhaar banking at 22 per cent and UPI at 12 per cent. Furthermore, 41 per cent of respondents said digital tools have helped increase income, and 37 per cent said they helped bring more customers. The survey covered 10,000 retailers and MSMEs.