Digital transactions reached a peak in terms of overall value during March, according to provisional data from the Reserve Bank of India (RBI).
The volume of digital transactions also rose in March and was the second highest in a month since the government announced demonetization of high value currency notes in November last year, according to the RBI data released late on Wednesday.
Transactions worth about Rs149.52 lakh crore (Rs149.5 trillion) were conducted through digital modes such as credit/debit cards, unified payments interface (UPI), unstructured supplementary service data (USSD), prepaid payment instruments (PPIs) and mobile banking in March.
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Digital transactions worth Rs104.05 lakh crore (Rs104.1 trillion) were recorded in December, the month during which the impact of demonetization was the strongest.
Data has been collated until 2 April.
Usage of PPIs such as mobile wallets and UPI also peaked in March. The volume of PPI transactions in March was 90 million as compared with 87.8 million in December. The volume of UPI transactions recorded in March was 6.2 million as compared with 2 million in December and 4.2 million in January.
UPI transaction volumes rose about 214% in March, from December, according to the data.
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Transactions through UPI received a major stimulus from the government after Prime Minister Narendra Modi launched the BHIM (Bharat Interface for Money) app on 30 December. The latest payment mechanism based on UPI is UPI@PoS — or, point-of-sale (PoS) machines that are configured to enable payments without swiping cards.
Debit and credit card usage at PoS machines rose by 6.29% in March to 225.7 million transactions from 212.3 million in the previous month. Transactions had declined by 14.6% in January from December and 20% in February from January.
Mobile banking transactions increased by 7.68% in March to 60.5 million from 56.2 million in the previous month. They had declined by 7.61% in January from December and 13.42 % in February from January.
Meanwhile, transactions through USSD fell by 6.03% in March compared with February.
Payments using National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) rose by around 26% and 66.23%, respectively, in March from February.
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“Most of the B2B payments are done during March; corporations are trying to make collections which come mostly through NEFT/RTGS. In case of surge in retail payments, especially the UPI, the government’s effort to popularize it has a major role to play," said Dewang Neralla, chief executive of Atom Technologies Ltd, a payment services provider. A whole new range of apps based on UPI is being launched, Neralla added.
“Now, people do not see any reason to hoard cash at home, instead they prefer to deposit it in bank accounts and make payments through digital modes," he added.
According to a recent research report by the State Bank of India (SBI), the cash withdrawals have not picked up even though the limits on withdrawals were removed from 13 March. The report suggested this may be the result of the move towards digital payments.