Digital payments in India reverse trend, grow in March

Total digital transactions in India stood at 893.9 million with value of Rs 149,58,910 crore in March, followed by 763 million volumes with Rs 92,59,450 crore in February 2017 and 870.4 million volumes with Rs 97,01,140 crore in January.

Although digital payments slowed down in January and February, they jumped in to stand at 957.5 million in volume and value at Rs 104,05,530 crore during December 2016 (end of demonetisation period). 

Vivek Kaul, author of Easy Money trilogy, in his blog post said, "There is a seasonality factor as well. March is the last month of the financial year and digital payments seem to go up during the course of the month, as people pay their taxes (advance income tax and service tax) as well as settle business payments between them."

There are ten major electronic payment system considered by the Reserve Bank of India (RBI) presently. They are - Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS), Cheque Truncation System (CTS), National Automated Clearing House (NACH), Unified Payment Interface (UPI), Debit and Credit cards at Point of Sale (POS), Prepaid Payment Instrument (PPI) and lastly Mobile Banking.

Here's an view of digital payment mode performance pre and post demonetisation. 

Seven out of ten digital payment mode saw decline between January – February and bounced back in March.

IMPS:

This payment mode saw 36.9 million transactions totalling Rs 31,180 crore from April 01 – April 16, 2017, this growth is slower compared to first two weeks of March 2017 where transaction volume was at 41.3 million at Rs 34,140 crore.

In volume terms, transaction stood at 67.4 million in March, 59.7 million in February, 62.4 million in January. On valuation basis, it was at Rs 56,470 crore in March, Rs 48,200 crore in February and Rs 49,120 crore in January 2017.

IMPS transaction rose from Rs 32,480 crore in November 2016 to Rs 43,190 crore in December 2016. 

From December 2016, IMPS has grown by 28% in terms of volume in March 2017

Debit card and credit card transactions at POS:

With ATMs running dry in many parts of India, usage of debit and credit cards should be rising on point of sale (POS) terminals.

Also Read: While currency in circulation improved, ATMs still run dry

At POS, cumulatively there were 125.4 million transaction made between April 01 – 18, 2017, totaling up to Rs 22,640 crore. From March 01 – 18, 2017, this mode held 132.8 million transaction with Rs 23,950 crore.

Just like every other digital payment mode, transactions at POS also suffered in the month of January and February  after recording transaction volume of 311 million with value Rs 52,220 crore in December 2016. 

Performance eased in March with 229.7 million transactions totaling up to Rs 41,620 crore. Though growth has been down by 26% in volume terms and 20.29% in value terms in March compared to December numbers. 

Mobile Banking:

Transaction through this mode has been on another roller coaster ride. Mobile banking came down to 64.9 million in January, 56.2 million in February and stayed at 60.8 million by end of March in volume terms. 

Between April 1-18, mobile banking reached 34.1 million transactions totaling Rs 56,650 crore. This is lower than 37.3 million transactions with Rs 91,180 crore recorded between March 01 - March 18, 2017. 

Growth in volume has come down by 13.39% in March compared to December, but valuation has increased by nearly 10% in March from December. 

This means that people used less transactions to transfer more money.