Unified Payments Interface (UPI)-based payments grew 9% sequentially, clocking 1.34 billion transactions in June. Such transactions not only bounced back to pre-covid-19 levels but also hit an all-time high, data released by National Payments Corp of India (NPCI) showed. The value of these payments was worth 2.62 trillion.
Transaction volumes improved significantly from April, when it nosedived to 999 million, due to the imposition of a nationwide lockdown that halted all services, barring essentials. Online payments and spending gradually picked up from May, with the phase-wise opening up of the economy. As many as 1.32 billion transactions, worth ₹2.22 trillion were clocked in February.
Experts said digital payments got a renewed push due to the outbreak of the global pandemic that prompted people to switch to contactless payments and a rise in e-payments is expected to continue.
The fact that the UPI transactions recorded in June showcase an all-time high, clearly indicates that there has been a metamorphosis in digital payments adoption, with the lockdown being the catalyst, Mandar Agashe, Founder & Vice Chairman, Sarvatra Technologies told Mint.
“There are multiple reasons why we have seen such a spurt in digital payments one of them being merchants across the country to have now opened doors to digital besides opening up of e-commerce for non-essential goods. Customers have shifted to e-payments for daily necessities and payments such as utility, mobile and grocery bills giving major push towards digital payments. With the lockdown extended across various parts of India, we see this trend to move upwards and more people doing digital payments,” Agashe said.
Aadhaar Enable Payment System (AePS) witnessed a slight dip in June at 397 million transactions from 405 million a month ago. Such transactions were worth ₹19,981 crores in June. AePS allows online interoperable financial inclusion transactions at Micro ATMs through the business correspondents of any bank using the Aadhaar authentication.
Anand Kumar Bajaj, managing director, and chief executive officer of fintech company PayNearby said the pandemic-mandated lockdown has disrupted the lives of millions in the country, hitting migrants and workers in the informal sector the hardest. In such a scenario, the government’s direct benefit transfer schemes, aimed at helping them tide over trying times are their lifelines. “Banking correspondents and AePS terminals are the key cash disbursal points in areas plagued with a scarcity of financial infrastructure,” he said.
“The monthly spike in AePS numbers is indicative that this trend will continue throughout the lockdown, and will pave the way for branchless banking alternative modes of cash transactions,” he added.
(With inputs from livemint