India opts for digital transactions; new users kick in

COVID-19 National Tech

     Digital newbies are emerging due to severe cash-crunches amid the nationwide lockdown. The last three weeks have seen a 42 percent spike in the digital transactions through apps, reports say.

By Neetu Saini

The nation-wide lockdown has facilitated a deep penetration      of UPI (Unified Payments Interface) apps for monetary transactions in the past few weeks. Consumers and merchants alike have now turned to mobile wallet and pay-through-phone apps to tide them over.

The lockdown has benefited digital payment platforms as 42 per cent Indians have turned to digital transaction in past three weeks, a report shows. Another survey by the consultancy firm, Local Circles, shows that Paytm and Google Pay are among the most used digital payment apps in India.  

In the wake of the coronavirus crisis, many consumers have started making payments digitally. Bills, grocery shopping and mobile recharging top the number of daily transactions.

Jotiram Chavan, a dairy owner residing in Navi Mumbai, said, “I’ve been using Google Pay and other online UPI gateways for two years, but I’m shocked to see the boom in the number of users. Earlier, people were reluctant to use such platforms for fear of online fraud.  But now, since      most of them is out of cash, they are relying heavily on digital wallets and other online transaction apps. On an average, 18-20 regular customers are paying digitally these days due to COVID-19. Before this, there were barely 3-4 users.”

A market place in Navi Mumbai

India’s total transaction value in the digital payment segment currently stands at $81,197 million with 553.7 million users in 2020. Besides, the transaction value is expected to annually grow to $134,588 million by 2023.

The digital payments giant Paytm has witnessed a drastic jump of 20 percent in the number of users, a report said,  as cash transactions across India is restricted due to the lockdown and people are struggling to make it till ATMs.    

“Going cashless seems to be the fastest solution during lockdown,” said Neepa Gandhi, Managing      Partner at Edelweiss Tokyo life insurance. “But a lot of doubts are still floating in the minds of people about the safety of the mode of payment. But yes, it is safe! Although certain privacy guidelines have to be followed. It is user-friendly too as no extra charges are deducted on multiple transactions. In future, digital transactions will help save the falling economy and in battling from such crisis.”

India’s push for building a cash-less economy seems to be gathering momentum. The Reserve Bank of India (RBI) said that. In 2018-19, the volume of the same was 58.8 percent compared to 50.4 percent in 2017-18.

Last year in October, the ministry of electronics and Information technology (MEITY) redistributed individual targets for banks while      increasing the target for e-transactions to 45 billion from 40      billion until March 2020. As of February, Unified Payment Interface has seen an increase of 1.4 percent in total transaction volume between January and February, data from the National Payments Corporation of India (NPCI) shows.

A user paying her electricity bill online amid the lockdown

In a bid to avoid any social contact to curb the spread of Covid-19, started a campaign called ‘India pay safe’ on March 19. Under this, the government has urged citizens to opt for digital payments instead of cash.

Many stakeholders and government authorities—including Niti Aayog’s Amitabh Kant and NPCI’s managing director and CEO Dilip Asbe, took to the social media to discourage the use of cash while paying bills, as any physical contact could spread coronavirus. 

Underlining the role of digital payments during this pandemic, Sandeep Issar, Chief Manager of the Delhi branch of the State Bank of India, said that this shift to the digital transactions has helped reduce the workload on banks amid the crisis. Now we can focus on other financial operations like granting loans and improving customer services instead of dispensing cash, which is generally the most time-consuming task. This smart move will not only reduce human contact but will also save customers’ time. These apps come with high-end security. And since the RBI has formulated certain rules and regulations for the online payment aggregators, people can now report any transaction fraud or failure in no time. Otherwise, banks are always there to assist customers in any difficult situation.”


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