Digital payments using UPI, mobile wallets got a boost last month thanks to the coronavirus Outbreak. This pandemic made the fear of virus transmission by using the paper currency among the people. It helped India to achieve the objective of demonetization, which it failed to achieve 4 years ago. This trend shows the consumer-led move towards digital payment.
In 2016, Prime minister Narendra Modi led government banned all the Rs.500 and 1000 Gandhi series notes to boost digital payments and the digital economy. Initially, digital payments showed a growing trend because at that time people struggled to get the newly issued notes. But it reverted to cash payment as the number of notes in circulation rose again. Now this pandemic gave a fresh boost to digital payments in India. Digital payment gains only seen for essentials services such as grocery, pharmacy, and mobile top-up and utility payments during the first weeks of India’s lockdown, where other businesses were closed.
RBI figures show that India’s digital payments per capita have grown to 22.4 transactions in the year ended March 2019, it is more than five times since 2015. But that’s still far below china. China saw 96.7 cashless transactions per person in 2017. It tells that India has more attachment to cash transactions. Recently digital payments showed growth but it’s only because of the coronavirus outbreak. A billion transaction per day is the aim of government as the world’s fastest-growing smartphone market empowers consumers to transact at the click of a button.
Digital payments only take three to four seconds to complete a transaction. Financial inclusion also can be achieved by boosting digital transactions. Cost and time-saving through increased efficiency and speed are the other sets of benefits of digital payments. People never used online payment or digital payment for paying bills, now buying groceries online, paying electricity bills, etc. Electronic fund transfers from banks which showed a downtrend in April as economic activity slows down have also rebounded. It quickened the pace of digital payment adoption even in small cities. The demand from small vendors for contactless payments also increasing.
