NPCI has seen digital payments fall in March, partly because inessential items were not being ordered by people via e-commerce, Praveena Rai said.
The National Payments Corporation of India (NPCI) is utilising the lockdown to increase the spread of digital payments, COO Praveena Rai tells Shritama Bose. While overall payment volumes have fallen of late, there is growth in the supermarket segment, says Rai. Excerpts:
How important are digital payments in today’s environment?
In the current environment of social distancing, we have initiated #IndiaPaySafe through our on-going ‘UPI Chalega’ campaign, to create awareness about paying safe with digital payments. We are also taking it a step further and spreading the awareness around digital payments. We hope that we can encourage a lot of people, who have been used to handling cash, to switch to digital payments and cultivate a habitual change. The campaign drives a broader message across the public in terms of using UPI as an easy, safe and instant way for digital payments. We’ve also tried to use certain celebrities to push the cause. We have created the UPIChalega.com microsite where all useful information on how to use UPI safely can be found.
In the last few days of the lockdown, what kind of shift have you seen in consumer behaviour?
In the current situation, we are not seeing discretionary purchases taking place. We are seeing transactions which are focused on critical purchases. For example, we are seeing good volumes coming from medical stores and supermarkets.
We have seen digital payments fall in March, partly because inessential items were not being ordered by people via e-commerce.
If the lockdown continues for long, what could it mean for these payment channels?
The overall volumes are down because it’s an economic indicator. In UPI, we have P2P (person-to-person) and P2M (person-to-merchant) payments. On the P2P payments, we’ve seen a decline due to social distancing, so all those payments that would have been made earlier are not happening today. On the other hand, payments like those to the staff or workers in a small company and by families to their drivers and domestic helps etc, are happening on UPI. However, the trend is more interesting on the P2M side. We are actually seeing an increase in volume in categories like supermarket and medical stores, which is an early trend and which reflects what is happening in the country.
We are working with several ecosystem players who are really looking at innovative solutions to solve the current problems. For example, people have become very used to paying by UPI through QR. Today, there are more than 15 million QRs in the market. However, in the current situation, consumers are actually avoiding physically going to the store. Similarly, the merchants are also not really wanting the consumers to come to the stores. So, both the parties are prefering to transact with social distancing. There are also payment service providers who are coming up with innovative means, such as apps which tell you about merchants around you and by following a link, you can buy goods using UPI. Another method is that of the merchant sending across a UPI ID and through the UPI ID a payment is being made. These solutions were not popular earlier.
The lockdown has thrown up operational challenges for many players in the payments system, such as business correspondents. What is being done to overcome these challenges?
The positive is that from day one, the government has kept NPCI, fintech partners as well as banks in the exceptional category. In the first few days, we also had certain challenges as did the ecosystem players. We have been working very closely with the government as well as the states to request their help and find mechanisms to help people work. These included business correspondents and people who handle cash at ATMs. Currently, things have stabilised.