Digital Payments Bounce Back To Pre-Covid Level
According to RBI data, UPI, operated by National Payments Corp (NPCI), processed 1.42 billion transactions worth Rs 2.31 lakh crore as of 28 June. This is the highest transaction in a month through this platform. Earlier in April, 99 crore transactions worth Rs 1.5 lakh crore were processed from the channel. This was the biggest monthly decline since the launch of the platform in 2016.
What is the reason for the increase?
Experts say that the reason for the increase in UPI is that more and more consumers are paying and purchasing bills through contactless means. COVID -19 has increased the speed of digital payments, said Ambareesh Kanghe, Senior Director, Product, Google Pay. The decrease in digital payments has now recovered in April. He said that in the months following the initial lockdown, bills and online recharge on the Google Pay platform had increased by 180 per cent.
Walmart's payment company PhonePe says its volume has recovered. Karthik Raghupathi, Vice President Strategy & Business Development, PhonePe, said that the payment volume has come down to the pre-lockdown level in June. This is because the offline and online business has started in most parts of the country.
Card-based transactions also accelerate
Similarly, card transactions have reached pre-COVID levels. Axis Bank, Kotak Mahindra, RBL Bank and SBI Cards say their card-based transactions have reached 70-80 per cent of pre-COVID volumes. Credit card payments have recovered more rapidly, while debit card payments have also increased in June compared to May.
What do the experts say?
Experts say allowing digital e-commerce companies to supply non-essential goods and digital shifts in entertainment and education have led to a boom in digital payments. But in sectors such as aviation, fuel, movies and dining, it is still sluggish as people are travelling less and cinema halls and restaurants are closed. It is clear from these trends that consumer sentiment is returning to track but a full recovery may take some time.
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