The transaction volume on the Unified Payments Interface hit an all-time high last month as people panicked to use banknotes due to the COVID-19 pandemic. Electronic transfer of funds via banks have also rebounded in comparison to how it was during April wherein economic activity had almost come to a halt.
The COVID-19 pandemic might eventually achieve what the demonetisation move failed to accomplish four years ago in India. Digital payments are on the rise for everything from grocery stores, cab fares, and electricity bills.
Initially, digital payments rose as people struggled to get banknotes, but they returned to cash as the number of notes in circulation rose again. Now due to the pandemic, people want to avoid close personal interactions and thereby, it is giving online payments the much-needed boost.
The overall online payments declined during the initial weeks of the nationwide lockdown with most companies shut. However, gains were seen for essential services which continued to function – hospitals, grocery stores, utility payments, and mobile top-ups.
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The pandemic has fastened the pace of getting used to online payments even in small cities; there is a massive demand from traders for contactless payment solutions. Unlike the demonetisation days, when the organised retail sector gained greater momentum from digital transactions, small grocery stores are now benefiting from the digital payments. Since online payments are quick, easy, and hassle-free, every other local vendor has now enabled online payments on their phones.
As per the recent surveys, three-quarter of consumers in India have increased their usage of digital payments since the outbreak of COVID-19. 78% plan to continue to increase their usage in the following six months. Among the 11 nations which were surveyed, this seems to be the highest figures as per the latest report released by the Capgemini Research Institute.
As per the recent surveys, three-quarter of consumers in India have increased their usage of digital payments since the outbreak of COVID-19. 78% plan to continue to increase their usage in the following six months. Among the 11 nations which were surveyed, this seems to be the highest figures as per the latest report released by the Capgemini Research Institute.
Another survey conducted by the Boston Consulting Group and Facebook indicated an increase in online payments since late March, despite a nationwide lockdown and said there is a high possibility that the trend will continue over the following six months.
For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in
Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.
