As per RBI reports, digital transactions have grown 13.5 per cent from Rs 109.82 trillion in August to Rs 124.69 trillion in September; the highest was in March at Rs 149.59 trillion.
In the year after demonetisation, digital transactions have grown considerably. Indeed, disruptions in the digital space have not only revolutionised the way we manage our finances, they have also made contactless and cashless transactions the preferred choice of many among us. And, with digital wallets, quick response (QR) codes, near field communication (NFC) technology, sound wave systems, virtual cards, unified payment interface (UPI) and Aadhaar Pay offering top-notch secure payments options, the smartphone has become the most sought after all-in-one device.Read more ↓
“We have registered 3.5X surge in digital payments this year and we will continue adding new online and offline use-cases, enabling more consumers and merchants to experience the power of digital payments,” says Kiran Vasireddy, COO, Paytm. Along with the growing usage of digital wallet in the past one year, the number of ATM transactions have also risen, showing the co-existence of cash and digital in the Indian economy. As per RBI reports, digital transactions have grown 13.5 per cent from Rs 109.82 trillion in August to Rs 124.69 trillion in September; the highest was in March at Rs 149.59 trillion. Mobikwik currently has 65 million app users, which has more than doubled after demonetisation. “Over the past one year, the industry has only grown over 55 per cent and has added 150 million users in the e-wallet platforms, along with 10 million merchants” says Upasana Taku, Co Founder, Mobikwik
Digital wallets and credit/debit cards have been the alternative to cash after demonetisation to cope with the cash crunch. “There was a surge right after demonetisation. After cash circulation was back in the market the peak has come down but the numbers are almost 35 per cent higher than what it was pre-demonetisation” says Praveen Dhabhai, COO of Payworld. A lot of people use wallets on a daily basis for a wide range of services including online recharges, utility payments, travel bookings and movie ticket among others.
Advantage of using digital payments
Low cost: The government and companies have been promoting digital payments by offering lower cost. For example, HDFC Bank has recently waived of charges on online transactions through RTGS and NEFT. Similarly, you do not need to pay service tax on card transactions up to Rs 2,000.
Saves time: Transfer of money between virtual accounts usually takes lesser time than wire transfer or a postal one, which may take may take several days. It is also better than standing in queues or in lines at a bank or post office.
Convenience: The biggest motivator for digital transactions is the ease of doing these transactions. With proper access to internet, financial transactions can be performed anytime and anywhere which attracts people to this segment. These transactions can be performed from anywhere without the need to be physically present there.
Low risk: Using digital wallet reduces the risk of losing your physical wallet or it getting stolen. Online fraud in cyberspace also exists but with proper measures e-currency is secure.
User-friendly: The government and the wallet companies have been working on their services and they have come up with much better and user friendly apps. There is also 24/7 support team to help and deal with any queries.
Controlling expenses: It is also said to be controlling your expenses as you can automatically keep track of expenses. These accounts contain the history of all transactions representing the money that has been spent which can be checked anytime. Controlled expenses result into higher investing, suggest experts.
Discounts: In the initial days of demonetisation, the wallet companies lured customers with attractive offers and discounts which have visibly come down in the current times. Online websites and portals linked themselves with the mobile wallets and heavy offers and discounts were given by them. Still, getting those offers and discounts is one of the reasons of the growing popularity of online and digital transactions.
The future of digital payments
Demonetisation has given the much required push to digital transactions. But there is still a long way to go for the digital payment system to become mainstream. With the government pushing for it and increased adoption by consumers, companies and experts are hopeful that it will continue to rise in the future. “We (Indian economy) are in a transition phase, digital mode of payments and cash will continue to co-exist, and presumably, even flourish simultaneously moving India towards becoming a ‘less-cash’ economy” says, Ravi B Goyal, Chairman & MD, AGS Transact Technologies.
“The push to get the unbanked on a banking platform is the key first step. On top of that, the penetration of cheaper data services provides the right conditions for digital payments to explode soon” says, Brijraj Vaghani, Founder and CEO, Ridlr, an app for cashless transportation. After demonetisation a lot of new wallets were launched and the existing ones in the market have been performing exceptionally well. “Going forward, we will play a key role in bringing millions of small merchants to the formal financial ecosystem, and make wealth management and financial services accessible to them. We believe this is a great opportunity for us to offer financial services and contribute to the growth of our country” adds Paytm’s Vasireddy.
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