Digital transactions decline in February
February saw total digital transactions worth Rs115.5 trillion, down 12.5% from Rs131.9 trillion in January, provisional data by the RBI showed
Digital transactions in February fell from the previous month in terms of both value and volume, provisional data released on Tuesday by the Reserve Bank of India (RBI) showed.
The month saw total digital transactions worth Rs115.5 trillion, down 12.5% from Rs131.9 trillion in January, according to the data. The number of digital transactions also declined marginally to 1.09 billion in February from 1.12 billion in January. The highest volume was recorded in January.
Digital transactions include those conducted via credit and debit cards, unified payments interface (UPI), unstructured supplementary service data (USSD), prepaid payment instruments (PPIs) and internet banking.Transactions across UPI yet again reached a new peak in February. The transaction volume was 171.2 million, up 13% from 151.7 million the previous month. The value of transactions rose around 23% to Rs191 billion in February from Rs155.4 billion in the previous month. Out of this, Bharat Interface for Money (BHIM) accounts for 9.88 million transactions, amounting to Rs4.01 billion.
Transactions through UPI received a boost after Prime Minister Narendra Modi launched the BHIM app on 30 December 2016. Until now, there have been more than 23.8 million downloads of the app on the Android platform and around 1.17 million downloads on the iOS platform.UPI is a payment system launched by the National Payments Corporation of India (NPCI) that facilitates instant fund transfer between two bank accounts on the mobile platform without having any details of the beneficiary’s bank. UPI was launched in August 2016 with 21 banks, and is currently being offered by about 86 banks.
Usage of PPIs such as mobile wallets, which reached a new peak in terms of both volume and value during January, saw a marginal fall in both terms. The volume of PPI transactions in February was 113.1 million as compared to 113.6 million in January.Transactions worth Rs36.5 billion were recorded in February compared with Rs38.3 billion in January. The provisional data considers transactions of PPIs issued by eight non-bank issuers for goods and services transactions only.
With the major mobile wallet companies still struggling to get their customers to comply with know-your-customer (KYC) norms, even as the RBI’s deadline for completing such verification ended on 28 February, the PPI transaction volumes are bound to witness a major decline in the coming days, Razorpay CEO and co-founder Harshil Mathur said.“We are seeing transactions through wallets decline considerably. On an average, in the first week of March itself, there has been around 50-55% decline in usage and we expect this trend to continue,” he said.
Debit and credit card usage at point-of-sale (PoS) machines also witnessed a fall in February. The volume of transactions decreased by around 8.8% in February to 247.1 million transactions from 271.1 million transactions in January. The value of transactions fell by around 11% to Rs 465.9 billion in February from Rs521.9 billion in the previous month. Card transactions of four banks have been considered by RBI.
Payments using National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) fell by around 2.7% and 4.8%, respectively, in February from the preceding month.“UPI is witnessing early traction as new companies are entering the payments industry every 1-2 months and promoting the use of UPI with incentives like cash backs and proper marketing. However, its volume is still lower when compared to other stable digital payments options like debit and credit cards,” added Mathur.
The Mint, New Delhi, 07th March 2018