Harshil Mathur, CEO and co-founder, Razorpay, said with the situation starting to ease out in parts of the country, the payments firm has seen a spike in transactions in the last few days, particularly in e-commerce.
Digital transactions on e-commerce picked up in the second week of May as lockdown restrictions were eased in some parts of the country, say industry players. As more people placed orders for products like electronic goods and even flight tickets, some platforms reported an up to 25% rise in transactions between the first and second week of May. Soon after the lockdown was announced, digital payments had seen a dip in volumes through the second half of March and the whole of April. In May, some of those volumes have started to come back with the easing of restrictions.
Harshil Mathur, CEO and co-founder, Razorpay, said with the situation starting to ease out in parts of the country, the payments firm has seen a spike in transactions in the last few days, particularly in e-commerce. “On our platform, we saw that the transactions in e-commerce (including transactions for non-essentials) increased by 25% in a week’s time (between May 11-18, compared to May 3-10),” Mathur said, adding that transactions through Unified Payments Interface (UPI) and cards grew by about 30% and 18%, respectively, indicating that spending patterns are getting back to normalcy. Madhusudanan R, CEO and co-founder, M2P Solutions, said there has been growth in categories such as grocery.
Payments players expect a further improvement in spends once the lockdown is lifted fully. Harjeet Toor, head — retail, inclusion and payments business, RBL Bank, recently told analysts that some categories of spends, such as groceries, utilities and digital entertainment have already come back and that gives the bank confidence of further improvement. “Even before Covid, about 55% of our spends were online. We expect that proportion to go even higher post Covid,” Toor said.
Earlier this month, FE had reported that bill payments through digital means have helped digital payment volumes recover in May. There are many who are paying their bills through electronic modes now are new to these payment channels and have taken to them in the absence of an alternative in the lockdown.
A similar phenomenon may be shaping up in the e-commerce space as well. Mathur of Razorpay said, “The consumer behaviour towards digital spending is picking up pace with more people shifting towards online payments especially from the tier-2 and 3 cities. We saw the transactions in cities like Ahmedabad and Jaipur grow by about 50% within a week’s time.”
According to a May 12 report by Capgemini, the shift to digital payments is part of a global trend towards contactless modes of availing consumer services in the wake of the Covid experience. The report included the results of a survey which found that 90% of Indians surveyed preferred to use their own mobile phones for in-store payments. “Covid-19 continues to hit hard across the world, consumers are putting a high price on health factors when interacting with organisations,” the report said, adding, “To reduce the risk of infection, people are anxious to minimise physical contact and maximise contactless interactions, and companies are taking note.”