An electronic payment channel — the Unified Payments Interface (UPI) — has bucked the trend of the decline in the value of digital transactions, which otherwise saw a significant reduction for the second consecutive month in February.
The UPI, managed by the National Payments Corporation of India (NPCI), reported transactions valued at Rs 1,728 crore in February, up from the Rs 1,659 crore in January, which, in turn, saw a huge jump over the Rs 700 crore in December.
However, the volumes declined to 3.8 million in February from the 4 million in the previous month. The volumes for the UPI stream in December were about 2 million, according to the Reserve Bank of India (RBI) data. Bankers have said the UPI has seen traction after big banks came on board and it is in a nascent stage. As for other channels of digital banking, some correction in volumes and values is expected after the uptick seen following demonetisation (till the end of December), when the system was facing the cash crunch (currency notes).
Most other electronic payment channels like mobile banking and the use of the credit and debit card at point-of-sale terminals (PoS) saw a dip for the second straight month in February.
The mobile banking stream’s activity in value terms declined from Rs 1,36,588 crore in December to Rs 1,20,666 crore in January and further to Rs 90,455 crore, according to the RBI’s representative data.
The value of transactions for debt and credit card usage at PoS, which was Rs 52,224 crore in December 2016, declined to Rs 48,124 crore in January and further down to Rs 35,243 crore in February.
Naveen Surya, managing director, Itz Cash Card and chairman of Payments Council of India, said electronic payment channels saw a sharp rise in activities after demonetisation.
In the first two months of 2017 most channels have seen a correction. Annual growth trend analysis is more relevant than week-over-week and month-over-month comparison. The overall digital payment/electronic payments are expected to grow 40-50 per cent annually, Surya added.