Demonetisation impact: Three years of digital payments growth achieved in seven months?
Demonetisation has led to higher digital transactions in India which has pushed the country to leapfrog into the future in terms of electronic payments.
Key Highlights
- India is currently 3 years ahead of its time in terms of digital payments.
- PoS transactions stood at Rs 73600 crore in May.
- Increased digital payments may even lower inflation.
If demonetisation had not happened to India in November 2016, it would have taken three years for India to reach current levels of digital transactions, a report by State Bank of India (SBI) said on Thursday.
“If demonetisation had not happened, it would have taken 3-years more for credit and debit cards transactions on PoS terminals to reach the current level of Rs 700 billion (assuming a yearly growth rate of 25%),” Soumya Kanti Ghosh, analyst of SBI said.
The report cited point of sales (PoS) terminal transactions which have crossed Rs 70,000 crore.
Prepaid instruments like m-Wallet, PPI cards, and paper vouchers and mobile banking have also seen a jump in terms of non-cash transactions.
“PPI witnessed a sharp growth with transactions value worth Rs 107 billion in May’17 compared to Rs 51 billion (Rs 5100 crore) in Nov’16,” the report said.
In May the PPI transactions value stood at Rs 10,700 crore while PoS transactions was at Rs 73,600 crore.
The value of these transactions had dipped in the month of February to Rs 9600 crore and Rs 64500 crore respectively which reports condoned as ‘seasonal.’
“We believe that increasing number of PoS terminals (post demonetization India banks have been able to set-up 11.8 lakh extra PoS terminals) and ease of doing digital transaction will increase this level further,” the report said.
Further it added that increased transactions via digital mode will even bring down inflation.
“The estimated model was statistically significant and the results indicate an increase in Rs 100 billion transaction by credit + debit cards at PoS terminals will lead to around 1.1% decline in CPI inflation, ceteris paribus,” the report said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
02:20 PM IST