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MUMBAI : A lengthy lockdown and the fear of infections from mass-use ATMs prompted many Indians to turn to Aadhaar-enabled Payment System (AePS) and point of sale (PoS) terminals to withdraw cash, central bank data showed.

Cash withdrawals from ATMs in April fell 47% from March to 286 million, data from the Reserve Bank of India (RBI) showed. In the same period, cash withdrawals from Aadhaar-enabled Payment System (AePS) terminals more than doubled to 87 million. Cash withdrawal volumes at point of sale (PoS) terminals grew 21% between March and April to 4 million, with customers restricting themselves to a more controlled environment and with several housing societies arranging for cash withdrawals at their doorsteps.

To be sure, the rise in alternate cash channels are from a lower base as compared to ATMs, a more mature withdrawal system. AePS also found favour in cash being pulled out from Jan Dhan bank accounts when the government’s direct benefit transfer (DBT) scheme got implemented.

Fino Payments Bank saw transactions on its business correspondents’ network through around 8,000 outlets of Bharat Petroleum Corp. Ltd (BPCL), which is also a strategic investor in the bank.

Rishi Gupta, chief executive, Fino Payments Bank, said while transactions through these outlets fell in the first 15 days of the lockdown, it has gradually picked up since.

“Roughly about 5-7% of our transactions happens through BPCL outlets. The numbers declined in the first 15 days of the lockdown because many of these outlets were shut, but it has now recovered and is back to pre-lockdown numbers in May and we expect it to grow 20-25% in June," said Gupta.

RBI data also showed India’s total digital payment volumes declined to 2.36 billion in April, from 3 billion in March.

Amitabh Kant, chief executive of government think-tank NITI Aayog, recently said the country is targeting one billion digital transactions per day in a push towards bringing more people under the ambit of such modes of payments.

“From three billion transactions in a month, we are targeting a billion transactions per day, and we are pushing for it," Kant said on 12 June, speaking through video-conference at CII’s fintech and digitization seminar.

The stringent lockdown that began on 25 March had led to a fall in digital payment volumes as e-commerce portals halted fresh orders and large retail outlets, except those selling essentials, remained shut.

“ATMs will innovate, keeping the public health angle in mind and evolve quickly. QR code-based cash-out at ATM will have to come up faster. People have stayed away from ATMs to some extent because they did not want to use those services where the risk perception was high," said Anand Kumar Bajaj, chief executive of PayNearby, a firm that provides digital banking services.

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