Financial services products, including payments for insurance and mutual funds, utility bill payments and e-commerce have driven digital payments growth over the last 30 days
BENGALURU: Digital payment transactions rebounded in the last month, as India began unlocking its economy following the covid-19 outbreak and the ensuing lockdown to curb the spread of the disease, according to a report by payment solution provider Razorpay.
While the unlocking has led to some recovery in digital payments, overall digital transactions have declined an average 12% in the last 101 days starting 24 March. The nationwide lockdown was imposed on 25 March.
Financial services products, including payments for insurance and mutual funds, utility bill payments and e-commerce have driven digital payments growth over the last 30 days. Also, several online firms had announced discounts on existing inventory to recover from the loss of business during the lockdown, boosting such transactions.
"The digital payments industry couldn't escape the pandemic crisis, we witnessed a dip of 30% in online payments since the lockdown began, and now seeing a rebound of 23% over the last 30 days is a sign of gradual revival of the digital economy. After witnessing an increased demand for digital payments in Tier 2 & 3 cities, I believe covid-19 has definitely propelled the final push to overthrow cash, which even demonetisation couldn’t," said Harshil Mathur, CEO and co-founder, Razorpay.
The Razorpay report added that categories such as utility bill payments and groceries have seen growth double when compared to pre-covid levels.
Payment categories like online education and medical services have also emerged as strong drivers for digital payments during the lockdown.
While the online education sector grew by 23% as extended lockdown led to a massive rise in demand for online courses, payments for medical services increased by 20%, with the rise of online consultations, the report said.
Digital transactions in categories like tour and travel, logistics, lending and food and beverage, however, have seen a severe decline during the last 100 days, as these industries continue to reel from the loss of business due to the pandemic.
According to the report, Karnataka, Maharashtra and Telangana were the major contributors to digital payments during the lockdown.
UPI continued was a clear choice for making payments, commanding a net 45% market share. Card payments and net banking followed next with 37% and 10% marking share respectively.
For e-wallet share of different players on the Razorpay platform, the report said, Flipkart-owned PhonePe was a clear winner for digital payments during the lockdown, garnering 45% market share. Amazon Pay followed a close second, as it continued to offer discounts and offers to lure customers to pay through the platform
The report added that while demand for digital and contactless payments remains high, the value of transactions has declined, which might result in a drop in revenues for the electronics payment market.
In June, total UPI transactions in the country hit an all-time high of 1.34 billion transactions, as per data from National Payments Corporation of India (NPCI). In April, UPI transactions totalled less than 1 billion.
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