New Delhi: With the cash crunch triggered by demonetisation easing, the pace of online transactions has started to slow.
According to provisional data released by the Reserve Bank of India on Monday night, the usage of debit and credit cards at point-of-sale (PoS) terminals has declined in January after peaking in December. The data has been collated until 23 January.
Debit and credit card usage at PoS machines has fallen by 41% in January to 183.15 million transactions from 311 million in the previous month. Transactions had surged by 51% in December compared to November.
Similarly, payments via mobile banking, mobile wallets, real-time gross settlement (RTGS) and national electronic funds transfer (NEFT) also declined in January as compared to December.
In January, RTGS, NEFT and mobile wallet transactions declined by 27%, 28% and 29%, respectively, compared to December. Transactions fell to 6.5 million from 8.8 million for RTGS, from 166.3 million to 119.14 million for NEFT and from 70.2 million to 47.4 million on mobile wallets.
The volume of transactions on the unified payments interface (UPI) and unstructured supplementary service data (USSD) have been on the rise since Prime Minister Narendra Modi’s demonetisation announcement on 8 November.
There was a sharp increase in the volume of UPI transactions to 3.06 million in January from 2 million in December and 0.3 million transactions in November. The growth in USSD volumes has been even more stark. USSD transactions have surged to 228,000 in January, from 102,200 in December and a mere 7,000 in November.
“UPI and USSD are still at an early stage with small user base in spite of more and more banks going live on UPI. Most of the payments... on e-commerce platforms are still done through debit/credit cards. Hence, the comparison of UPI with other electronic modes of payment will not give a clear picture. The real competition for UPI should be Internet banking," said Naveen Surya, managing director, ItzCash Card Ltd, and chairman, Payments Council of India.