DIGITAL TRANSACTIONS BOOMING IN INDIA POST-DEMONETIZATION
Customers in India are welcoming smart payment options with open arms and are giving significant boost to the digital payment revolution. Digital payments are expected to boom in India by 2020 which means people across the nation are expected to make transactions by using digital payment solutions by 2020.
In order to provide the merchants with additional modes to accept payments and later to cut the effects of demonetization, many companies devised an easy to use, user friendly and affordable mobile point of sale (mPOS) terminal for all sizes of businesses to receive payments anywhere, anytime.
The frequency of transactions continues to grow at a rapid rate according to the data released by the Reserve Bank of India which showed that October saw the highest ever mobile transaction volume at 965 million, a jump of 10% against 877 million in September and overall it rose to 31% from November last year to September this year.
In the nation post-demonetisation, the term ‘cashless’ has come into existence to define things like card payments, mobile wallets and other online payment modes. Overall, the card transactions (both debit and credit) actually make the cashless transactions in bulk.
In October, debit and credit card payments jumped 6.4% to 255.7 million transactions from 240.3 million transactions in September. Also, ATM transactions dropped 10% to 716.3 million in August from 802 million in October last year, according to RBI.
Not only have the card transactions fully dominated the number of transactions when it comes to digital transactions, the value of transactions via mobile wallets has also increased. Wallets which were stagnating around 90 million transactions on an average per month since January this year, jumped 10% to 96.2 million from 87.5 million in September. Payments via mobile wallets jumped 3 to 4 times in October boosted by ‘shaguns’ going digital during Diwali and Bhai Dooj.
Though mobile payments are on the rise, cash still remains the king in the times of low-value transactions. Another study found that about 76% of the customers still prefer to use cash, but this number seems to be reducing. This study actually compared trends before and after demonetization. The executive director of Centre for Digital Financial Inclusion (CDFI) and principal architect of digital innovation lab of IIMB Shashank Garg, Krishnan Dharmarajan led a survey and stated, “We found 63% retailers wanted to go cashless, which was only 31% before the note ban.”