DIGITAL PAYMENTS JUMP IN SMALL TOWNS, CITIES AS PEOPLE AVOID CASH IN PANDEMIC
BENGALURU: Digital payments are moving beyond the metros, and electronic payment firms are positioning themselves for the change. With the pandemic prompting more people to try out contactless transactions, firms are rolling out products and features to tap the new frontiers.
While BharatPe said transaction values have risen 30-35% in tier-II geographies and beyond, Paytm Payments Bank (PPB) said its share of transactions from tier-II, -III and -IV locations has increased from 60% to 67% in the past six months from around 50% in 2018. PhonePe said 70% of its transactions now come from tier-II, III cities and beyond, while Freecharge said its share of transactions from smaller towns are up from 3% preCovid to 5% now.
“In the past five months, with people staying indoors, the demand for online payments grew by 40% in tier-II and -III cities. Earlier, consumers from a lot of these tier-II and -III cities would only order essentials online, but are now demonstrating high adoption for non-essential purchases like bill payments, video streaming subscriptions and even dating and matrimony services,” said Harshil Mathur, CEO and co-founder, Razorpay, an online payment gateway provider to businesses.
Paytm Payments Bank has earmarked ₹100 crore to promote its point-of-sale device, Paytm Soundbox, in tier-II and -III regions, apart from introducing digital ledgers for merchant partners and a product to help small enterprises make bulk payments. It said it has signed up over 3.6 million merchants in rural areas.
This week, PhonePe said it will increase its acceptance to 25 million small merchants this year, including kirana store owners across 5,500 talukas in tier-III and -IV regions. BharatPe has been expanding its QR-based payments service in smaller towns.