While industry experts were anticipating to see a decline in digital payments with most business temporarily going on hold due to the coronavirus (Covid-19) pandemic, payments gateway Razorpay has noted the opposite. The B2B fintech startup has registered a 10% hike in the value of digital payments transactions from February to March 19.
Razorpay announced that unified payment interface (UPI), internet banking and payments wallets were the top three modes of payments in the time period. The UPI payments have seen a 19.6% hike, followed by internet banking and wallet payments with 11.5% and 10.3%, respectively. Surprisingly, as per Razorpay’s report highlighted the digital payments in Bengaluru have declined by 3.2% and by 2.6% in Delhi. Meanwhile, the digital payments in Ahmedabad, Hyderabad and Pune have increased by 11%, 7% and 5% respectively.
As most have been advised to stay indoors to minimise exposure, consumers have turned to online delivery and payment services to meet their daily needs. Razorpay also announced that government and utility bill payments have noted a 30% spike, meanwhile online grocery segment has also noted a 9% growth for the first time. Ecommerce segment has also noted an increase in payments.
Harshil Mathur, CEO and cofounder of Razorpay, said, “On the flip, people are having to stay indoors and not having enough spending power, this can make the overall consumer spending go down creating a lasting (negative) impact. Nevertheless, we are all prioritising the right things now to ensure that the health of all of us is being taken good care of.”
While Razorpay’s report suggested a 10% rise in digital transactions in terms of value, industry experts have been estimating a fall in digital transactions in metro cities, especially due to the travel ban. The report highlighted that the impact has not been much in other cities and towns, but metro cities have been impacted due to the travel ban. As the number of people travelling by air is much higher in metro cities.
Industry executives told ET, “With industries across the board seeing a sharp slowdown, the digital payments sector is estimated to have registered a decline of around 30% in transaction value over the past few weeks.” Even Pine Labs chief business officer Kush Mehra noted that their daily routine of the consumers has been impacted.
Meanwhile, several big names in the Indian startup ecosystem like Niti Aayog CEO Amitabh Kant and Sequoia Capital India’s managing director Rajan Anandan, recently took to Twitter to encourage people for making online payments. Both Kant and Anandan, in separate tweets, emphasised that digital payments is the safest way to make payments to ensure minimum exposure to coronavirus.
Safest way to make payments: Use Digital Payments only to ensure social distancing and defeat COVID-19 together. Pay safe, stay safe.#IndiaPaySafe #UPIChalega #IndiaStaySafe #PaySafeIndia #IndiaFightsCorona @narendramodi @PMOIndia @NPCI_NPCI @dilipasbe @rsprasad@dilipasbe pic.twitter.com/KxWD70eMCv
— Amitabh Kant (@amitabhk87) March 19, 2020
Last month, Reserve Banks of India (RBI) governor, Shaktikanta Das, highlighted that digital payments account for almost 97% of the daily payment system transactions in terms of volume. He also noted that digital payments have accelerated by 50% in terms of volume in the last five years.