Improved Spends: Driven by storefront QR codes, offline merchant transactions grow

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October 21, 2021 4:15 AM

Industry players attributed the pick-up in offline digital transactions to the pandemic-era habit of minimising cash usage as also the unlocking of businesses after the second Covid wave receded.

digital payments, QR codesThe surge in offline merchant payments during Q2FY22 has been aided by the opening up of more stores and businesses ahead of the festive season and after the second wave of Covid-19

Offline merchant transactions, driven by storefront quick response (QR) codes, grew faster than online merchant transactions during the quarter ended September, according to a report by PhonePe. Industry players attributed the pick-up in offline digital transactions to the pandemic-era habit of minimising cash usage as also the unlocking of businesses after the second Covid wave receded.

In its report on digital payment trends in July-September, PhonePe said that offline merchant payments — such as paying at kiranas in store — grew faster than online merchant payments at a sequential rate of 65%. “In a clear indicator of recovery post the second wave of the pandemic, and stores rapidly opening up, nearly four out of five merchant payments are now offline payment transactions,” PhonePe said in the report.

Industry executives are of the view that the increased incidence of digital payments that was observed when the pandemic first broke out has turned into a habit for many people. Consumers now seek the same convenience in paying for groceries or vegetables that they have got used to while ordering food or electronics online.

Anand Kumar Bajaj, founder & CEO, PayNearby, said the rise in offline payments seen in the last few months is a direct outcome of people getting used to paying digitally for e-commerce products and services over the last two years. “We have also seen the number of QR-enabled storefronts rise by 22-23%. The newly acquired convenience of paying online from home has now translated into a search for a similar kind of convenience offline,” he said.

The surge in offline merchant payments during Q2FY22 has been aided by the opening up of more stores and businesses ahead of the festive season and after the second wave of Covid-19. Independent fintech expert Parijat Garg said the number of merchants offering QR-based payments has increased, with small roadside shops and vegetable vendors also joining in. “This year, the growth in transactions has been good because of improved sentiment and the easing of mobility restrictions. The fact that there is no fixed cost involved has also helped the adoption by a large number of offline merchants,” Garg said.

Historically, merchant payments at brick-and-mortar establishments in India relied mainly on debit and credit cards, which required a point of sale (POS) machine at every store. The spread of QR-based transactions has offered merchants, especially those operating on thin margins, an option to accept cashless payments with hardly any increase in cost.

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