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Digital Payments: Get Uptick Amidst COVID-19 Crisis
Due to the coronavirus outbreak, fintech platforms have been witnessing a rise as people are switching to digital payments to maintain social distancing
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With the world under the grip of the Covid-19 pandemic, fintech platforms have witnessed a sharp rise in the number of users as cash transactions across the country see a decline due to India facing a lockdown, avoiding cash transaction.
Spurt in transactions
Fintech majors Paytm and PhonePe have seen a spike in transactions and have revamped their user interface to provide more essential payments. Paytm, a major player in the sector, has been witnessing a 20 per cent growth in digital payments as compared to the regular days. The number of users since February visiting the Paytm app and the number of sessions per user has also increased, according to a Paytm spokesperson. The company is also seeing a surge in repeat transactions for various use-services like fuel stations and utility payments among others. Offline payments have grown by 12 per cent owing to more people preferring Paytm over cash. “There is also a 15 per cent increase in incoming requests from offline merchants to partner with Paytm. We are seeing a trend that merchants are offering home deliveries in their neighbourhood and suggesting their customers to Paytm as they fear the bacterial load on hands and cash,” mentioned the spokesperson. Similarly, the Walmart-backed PhonePe has also reported an increase in transactions through its platform. Karthik Raghupathy, VP Strategy & Business Development, PhonePe, said: “We have seen a significant spike in transactions for cases like money transfers, mobile recharges, DTH and bill payments on our platform. There has also been a surge in the volume of transactions on the PhonePe Switch platform, especially in the case of our partners providing essential supplies such as groceries, medicines and food. We are also witnessing the growth in grocery purchases at offline stores with payments being made via PhonePe.
These trends are applicable across all locations, including and the National Corporation of India — an umbrella body for all kinds of digital payments — have urged people to switch to digital payments to maintain social distancing. The RBI Governor Shaktikanta Das asked banks to encourage the use of digital payments. “In the context of the efforts to limit the fallout of the coronavirus pandemic by avoiding social contact and visit Due to the coronavirus outbreak, fintech platforms have been witnessing a rise as people are switching to digital payments to maintain social distancing tier-2 and 3 cities and beyond.” On the other hand, Truecaller has not observed much difference, but it is positive about its long-term impact. Sandeep Patil, MD, Truecaller India, said: “Digital has become the de-facto mode of payment in this social distancing and remote services.”
Similarly, the Reserve Bank of India to public places, public can use these modes of digital payment from the convenience of their homes through online channels like mobile banking, internetbanking, cards, etc. and avoid using cash which may require going to crowded places for sending money or paying bills,” the RBI urged. The country’s count of positive cases has touched 9,152, with 308 deaths and 857 recoveries. Worldwide, the number of infected cases has jumped to over 1,859,011, with deathtoll over 114,979. Currency notes are one of the most potent carriers of the deadly virus, and health departments and experts across India are asking people to avoid touching cash and use digital payments.
Rise in UPI Payments Unified Payment Interface (UPI)
recorded over 1 billion transactions in the month of March, although both volume and value of payments dipped as compared to the previous month. The reason is due to curbs on daily commerce and limited economic activity on account of restrictions imposed to slow the spread of coronavirus. A sum of 1.25 billion UPI transactions worth Rs 2.06 lakh crore in March was processed by NPCI, which is a 6 per cent decline in volume and a 7 per cent dip in value of UPI transactions compared to 1.33 billion transactions worth Rs 2.22 lakh crore in February, a latest data disclosed by NPCI.
Earlier, demonetisation, penetration of smartphones, internet in the hinterland of India, attractive discounts led people to use such platforms, and now Covid-19 pandemic. Tej Kapoor, Co-Executive President, Fosun RZ Capital, said: “Currently, the investment scenario in any sector is dull. But as soon as it is over, the market will pick-up.” He also added that the epidemic will lead the market to its bottom but will soon sour high in the coming times. India’s digital payment story has unravelled new layers and growth heights every year since its inception in 2014 with startups turning into unicorns today. The fintech sector has witnessed around 19 per cent of overall tech investments in FY19. This share was a mere 4 per cent back in 2014. PostCovid-19, the world might be different but the reality will be known only after the crisis ends.