Cash Takes a Dig­i­tal Leap

The Economic Times - - Finance & Commodities -

Dig­i­tal trans­ac­tions saw a phe­nom­e­nal rise in De­cem­ber and Jan­uary but card use through PoS units has come down

Mum­bai: Data re­leased by the Re­serve Bank of In­dia shows that the num­ber of trans­ac­tions on Uni­fied Pay­ments In­ter­face (UPI) jumped 560% be­tween De­cem­ber andNovem­ber­lastyearand110% be­tween Jan­uary and De­cem­ber. On the other hand, Un­struc­tured Sup­ple­men­tary Ser­vice Data (USSD) shot up 1,360% be­tween Novem­ber and De­cem­ber and buoyed the Jan­uary to De­cem­ber jump to 207.5%.

Trans­ac­tions on UPI jumped to 4.2 mil­lion for Jan­uary against 0.3 mil­lion in Novem­ber while that onUSSD leapfroggedto3,14,000in Jan­uary from 7,000 in Novem­ber.

“In per­cent­age terms, the num­ber is very high since the base is very low, but there was a huge hype cre­ated around BHIM pay­mentsap­pli­ca­tion­whichus­esUPI rail­roads and USSD for fea­ture phones which re­flects in the num­bers shown by RBI,” said Bhavik Hathi, MD at con­sul­tancy firm Al­varez&Marsal. Hathi said the jump in USSD was be­cause a ma­jor part of In­dia still uses fea­ture phones. Na­tional Pay­ments Cor­po­ra­tion of In­dia, which runs UPI and USSD, said prize money be­ing an­nounced by the govern­ment for peo­ple do­ing max­i­mum trans­ac­tions dig­i­tally could be a ma­jor rea­son for this jump.

Card­trans­ac­tion­sthrough­point of sales ter­mi­nals showed an 18% de­cline for Jan­uary com­pared to De­cem­ber. Bankers say the fall could be be­cause of slug­gish de­mand in Jan­uary. “We have ob- served a lit­tle slow­down in Jan­uary, but that num­ber is not very huge,” said Arund­hati Bhat­tacharya, chair­man, State Bank of In­dia. “I be­lieve the dig­i­tal­pay­mentsmo­men­tumwill­con­tinue.ForSBIPay,ourUPIap­pli­ca­tion, we have re­ceived two lakh reg­is­tra­tions and have re­ported around 11lakh trans­ac­tions.” While card pay­ments showed spo­radic­growth,in­dus­try­ob­servers say lack of ter­mi­nals in smaller towns and peo­ple’s com­fort with mo­bile phones will make mo­bile phone based pay­ments to pick up. “There is a psy­cho­log­i­cal sense of se­cu­rity that peo­ple feel while pay­ing through phones as there is no phys­i­cal hand­ing out of the de­vice, which is not the case with cards, which In­di­ans are al­ways wor­ried about,” said Hathi.

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