Coronavirus outbreak: Striding towards cashless economy

The Covid-19 pandemic has hurt most industries, but it has sped up the transition towards a cashless digital economy with more and more people locked-up at home resorting to online payments.

According to National Payments Corporation of India (NPCI) data, payments on Unified Payments Interface (UPI) in June hit an all-time high of 1.34 billion in terms of volume with transactions worth nearly Rs 2.62 lakh crore.

The payment companies that DH talked to say that there was a dip initially when the lockdown began but it picked up by April end and there’s has been constant growth in the number of users using the platform.

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At PhonePe, monthly acquisition numbers in February were around 75 million but during the lockdown, the numbers peaked at 80 million.

On the transaction count, since offline stores were closed, the company did see a 25% dip in March and April but as the stores have opened up from May, the numbers are back on track.

Karthik Raghupathy, VP Strategy & Business Development, PhonePe said, “We have seen a significant spike in transactions for use cases like money transfers, mobile recharges, DTH, bill payments and gold on our platform.”

“There has also been a spike in the volume of transactions on the PhonePe Switch platform, especially in the case of our partners providing essential supplies such as groceries, medicines and food. We have also witnessed growth in grocery purchases at offline stores both in terms of volume as well as ticket size,” said Raghupathy.

Another online payment platform MobiKwik acquired around 60 lakh new users during the Lockdown in April and May.

“While recharge and bill payments have seen growth throughout the lockdown period, the real star for us has been offline payments -- whether it’s a small Kirana store or a branded store, the numbers, we have seen a 640% growth in the online retail segment as compared to the pre-Covid period,” said Upasana Taku, Co-founder, MobiKwik.

Harshil Mathur, CEO & Co-founder, Razorpay mentioned that during the first lockdown, businesses and payment volumes were down by 30%. “With e-commerce deliveries and the aviation sector having resumed, we are seeing a recovery for online payments. On our platform, we saw that the transactions in e-commerce increased by 25% in a week’s time. Also, the usually hailing payment methods like UPI and Cards grew by about 30% and 18% respectively.”

“Despite the lockdown, we continue to add over 1,000 merchants every month for this app,” said Mathur.

Fintech startup YAP is also seeing high activity in customer segments that are day-to-day categories. “It has grown by over 30% for the same base of customers (About 3 million customers) vis-a-vis Pre-Covid levels seen in January or February this year,” said Madhusudanan R, Co-founder, YAP.

“Contactless spends activation has witnessed a ramp-up, we see 10-15% (About 1.5 million customers with NFC enabled cards) new customers trying NFC transactions for the first time in the last 60 days,” he said.