Mumbai: Demonetisation has boosted the digital platforms for payment, which has helped the National Payments Corporation’s (NPC) RuPay card usage at merchant terminals soar seven times since 8 November, taking the daily volumes to over 2.1 million.
The Reserve Bank of India (RBI)-administered retail umbrella body for all retail payment is targeting a daily volume of 5 million transactions through RuPay cards by next December. “Usage of RuPay cards at point of sale (PoS) and for e-commerce together that used to be about 3 lakh per day (before the demonetisation), is now about 2.1 million, which is a seven-times jump," NPCI managing director and chief executive AP Hota said.
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So far, the corporation has issued 317 million RuPay cards, which include 205 million cards to Jandhan account-holders. On 8 November, the government demonetised high value worth over Rs20.51 trillion notes, or 86% of the currency in circulation. This was followed with curbs on cash withdrawals both from the branch counters and ATMs.
This led to a cash crunch as RBI could not print enough notes for distribution and replenish the money equivalent to the scrapped amount. With less cash in hand, people were forced to adopt digital transactions leading to an increase in usage of cards and other alternative modes for making payments. “Had there been no demonetisation, it would have required enormous efforts from our end to increase the volume from 3 lakh a day to 2.1 million a day," Hota said, adding however, that he is not happy with this volume and wants it to grow to 5 million a day.
“We should have a minimum 5 million transactions per day. I would say a less-cash society has arrived when we start seeing at least 5 million RuPay card transactions a day," he said. But Hota, who is on deputation from the RBI, was quick to admit that it will take at least another year or so to reach to that level. Meanwhile, he said since the note ban, the unstructured supplementary service data (USSD)based mobile banking service from the Corporation also saw its per day transaction increasing to 0.6 million from about 0.15 million a day.
As of the end of this month, transaction volume through the technologically more advanced Unified Payment Interface (UPI) jumped to 70,000 a day from about 35,000 per day, Hota said. So far 33 banks have joined the UPI platform launched by the NPCI this April.