At present, people are choosing to access cash through the BC channel rather than going to branches where they will come in contact with other people or to ATMs which are not being sanitised.
All modes of digital payments saw a dip in usage during March as the Covid-induced lockdown led to a slowdown in consumption and e-commerce firms virtually stopped accepting new orders, industry players said. There could be a pick-up in transactions as the lockdown is lifted and the supply chain normalises.
Transactions made through the Unified Payments Interface (UPI) channel fell to 1.25 billion in March from 1.32 billion in February and the value of money moved declined to Rs 2.06 lakh crore from Rs 2.22 lakh crore. Immediate Payment Service (IMPS) transaction volumes fell to 217 million from 248 million in February and the value of transactions dropped to Rs 2.02 lakh crore from Rs 2.14 lakh crore. While March data for card payments, National Electronic Funds Transfer (NEFT) and mobile/internet banking are yet to be released by the Reserve Bank of India (RBI), industry executives say the decline in usage was across channels.
Harshil Mathur, CEO and co-founder, Razorpay, said in the first two weeks of March, digital payments were actually rising but they steadily fell after the announcement of the nationwide lockdown. “On an average, transactions were about 10% up in the first half of March, but once the lockdown came into effect, overall payments were down by about 30%. Initially, spending on groceries and utility bills was rising even though payments for travel fell, but thereafter, everything fell because even on e-commerce supplies were unavailable,” Mathur said.
Transactions through the Aadhaar-enabled Payment System (AePS) also slowed in March as business correspondents (BCs) offering assisted banking services were unable to reach their customers in the hinterland. Anand Kumar Bajaj, CEO and founder, PayNearby, said that such transactions could pick up in the days ahead as more people line up to access the cash being transferred to them as assistance amid the lockdown. “With DBT (direct benefit transfer) disbursements coming in, AePS transactions will shoot up,” he said.
At present, people are choosing to access cash through the BC channel rather than going to branches where they will come in contact with other people or to ATMs which are not being sanitised. Experts say UPI will also catch up in some time as payment service providers are offering the acceptance mode through apps rather than the existing method of pasting the UPI QR code at storefronts.