Bill payments drive digital payment volume recovery in first half of May

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Published: May 19, 2020 9:36:39 AM

A number of people who were earlier used to paying their utility bills in cash may have shifted to the digital channels during the lockdown, they added.

online Bill payments, digital payment volumes, Fino Payments Bank, DTH payments, OTT platforms,bill paymentsPayPoint India managing director Ketan Doshi said most of the payments at this stage have been bill payments.

An increase in online bill payments and a pick-up in remittances helped digital payment volumes recover in the first half of May, industry players said.

A number of people who were earlier used to paying their utility bills in cash may have shifted to the digital channels during the lockdown, they added.

Fino Payments Bank MD and CEO Rishi Gupta said, “Some of the people who used to pay bills in cash have now switched to digital.” He added that the payments bank has seen a close to 60% growth in digital payments for gas bills, 20% in payments for landlines and broadband and 7% for direct-to-home (DTH) payments.

PayPoint India managing director Ketan Doshi said most of the payments at this stage have been bill payments. “We are seeing bill payments coming in a big way because the counters of utilities are not open and they also internally want to avoid handling cash. Even customers want to avoid handling cash,” he said, adding that about 40% of these users are new to digital modes of paying bills.

As people spend more time at home, over-the-top (OTT) platforms and streaming services have seen a rise in subscribers. Payment players are seeing this as a new driver for digital payments. “An emerging segment could be OTT. As more people stay home, this could be the biggest area of growth, along with payments for their TV (television) subscriptions,” Doshi said.

Remittances, too, have improved by 35-50% from their April levels. Soon after the nationwide lockdown was announced on March 24, domestic remittances had taken a hit, with most players reporting a 70-80% month-on-month drop in volumes in this segment.

Full recovery in this segment could take a few more months, going up to September, as workers who have lost their jobs take a while to get back their incomes, said Gupta of Fino. As for other categories of consumption-based payments, recovery could be swifter. Payworld COO Praveen Dhabhai said, “In the next 30-45 days, things will become normal for all retail channels, except for travel or high-end fashion.”

In the meantime, Aadhaar enabled Payment Systems (AePS) will continue to rule the roost among the different channels of digital payments as money transferred by the government through direct benefit transfer (DBT) continues to be withdrawn. Increasingly, they could come to replace ATMs as the preferred mode of cash withdrawals. “AePS volumes may drop, but not necessarily to their earlier levels because people will not immediately start going to ATMs or banks,” Dhabhai said. He added that average transaction values on AePS have started to rise of late and that proves its utility beyond cash transfers.

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