Demonetisation and the government's initiative to promote use of debit and credit cards at point of sale (PoS) terminals accelerated the growth of digital payment with the transaction volume reaching Rs 70,000 crore level in seven months, says a report.
Demonetisation and the government’s initiative to promote use of debit and credit cards at point of sale (PoS) terminals accelerated the growth of digital payment with the transaction volume reaching Rs 70,000 crore level in seven months, says a report. “If demonetisation had not happened, it would have taken three years more for credit and debit cards transactions on PoS terminals to reach the current level of Rs 70,000 crore, assuming a yearly growth rate of 25 per cent. India has leapfrogged three years of digitisation in just 7 months,” according to an SBI report, ‘Ecoflash’. Even after seven months post-demonetisation, the transaction value is quite large and approximately double of what it had been corresponding month or period last year. Post-demonetisation, banks have been able to install 11.8 lakh additional PoS terminals, the report said. Increasing number of PoS terminals and ease of doing digital transaction will increase this level further, it said. Similar trends are observed in usage of pre-paid instruments (PPI) including m-wallet, PPI cards, and paper vouchers and mobile banking too, the report said.
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PPI witnessed a sharp growth with transactions value worth Rs 10,700 crore in May 2017 against Rs 5,100 crore in November 2016. The report further said that such digitalisation will result in lower inflation. An increase of Rs 10,000 crore-worth transactions by credit and debit cards at PoS terminals will lead to around 1.1 per cent decline in CPI inflation, the report said. “This augurs well for a lower inflation regime going forward,” it said.