Electronic money transactions are back to pre-demonetization levels
Except Unified Payments Interface (UPI), all other non-cash payments transactions have declined
To hasten India’s shift towards a cashless economy, the government has been aggressively pushing digital payments, which had gained momentum after demonetization. However, six months later, Indians seem to have gone back to their old ways of cash. According to Reserve Bank of India (RBI) data, the total value of electronic payment transactions declined to Rs94.21 trillion in May from Rs109.60 trillion in April—showing a month-on-month decline of 14%. The value of transactions now is closer to the value in November at Rs94 trillion, when demonetization began.
Except Unified Payments Interface (UPI), all other non-cash payments transactions have declined. In case of UPI, the transaction value rose to Rs2,450 crore from Rs2,200 crore in April. However, UPI, is a recent addition to the electronic payments category, and the number of transactions here are not very high. It went live only in August 2016.
The value of prepaid payment instruments (PPI) saw marginal growth, to Rs2,280 crore from Rs2,230 crore. However, the number of number of transactions declined about 7.3%.
All other electronic payment channels saw a dip in both transaction volumes and value. For instance, the value of National Electronic Funds Transfer (NEFT) transactions fell from Rs12.15 trillion to Rs10.40 trillion, down 14.4% month-on-month. Similarly, fewer people used debit cards and credit cards in May, compared to April. Data shows that card transactions were down 10.5%, from Rs43,140 crore to Rs38,590 crore month-on-month.
The provisional data is provided by RBI on its website. Numbers are sourced from RBI and NPCI. For card transactions, RBI has considered only four banks. For PPI, RBI pulled data of eight non-banks for goods and services transaction only. And for mobile banking, date from five banks has been considered.
All transaction figures in the story are as per RBI data published on 30 May 2017.
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