ADVERTISEMENT

Digital Payment Users Jumped Over 60% Since Demonetisation, Says NPCI

Are digital payment users still on the rise in India?

A Paytm sticker is displayed on the front windscreen of a rickshaw in Bengaluru. (Photograph: Dhiraj Singh/Bloomberg)
A Paytm sticker is displayed on the front windscreen of a rickshaw in Bengaluru. (Photograph: Dhiraj Singh/Bloomberg)

The cash crunch in the aftermath of the demonetisation of Rs 500 and Rs 1,000 notes in November nudged as many as six crore users onto digital payment services, said Dilip Asbe, chief operating officer of the National Payments Corporation of India (NPCI). This was in addition to nearly four crore users ahead of the currency ban.

Of the new users, around 2.5 crore continued to use digital means of payments after the restrictions on cash were withdrawn, Asbe said. Which means, the numbers of users transacting online has gone up 60 percent since demonetisation, according to data cited by the NPCI.

While the numbers are not directly comparable, representative data released by the Reserve Bank of India showed that volumes of electronic payment systems rose 33 percent in March compared with November when demonetisation came into effect. The data also showed that electronic payments rose in December, and fell in the next two months before spiking again in March.

Digital Payment Users Jumped Over 60% Since Demonetisation, Says NPCI

“It’s early days from that standpoint (of getting more people to use digital modes of payment). So, as far as UPI (Unified Payment Interface) is concerned, we are looking at trying to get the ecosystem built up,” said Asbe on the sidelines of an event in Mumbai.

He anticipates that “acceptance” of UPI as a mode of payment will take at least another three to six months.

The UPI, which was launched by the NPCI in August last year, is only one of many payment options that have gained prominence over the past few months, with the government championing the cause of digital payments. The government this year launched the BHIM application that facilitates UPI transactions, and also introduced the BharatQR currently being implemented by banks.

The government is expected to launch Aadhaar Pay, a payment option at the merchant level that will leverage biometric data collected by the Unique Identification Authority of India, this Friday. Apart from these, the use of cards and mobile wallets has also gained traction.

While the initial goal of the NPCI was to encourage peer-to-peer transactions using UPI, it is now increasingly focussing on payment options at the merchant level, Asbe said.

Merchant applications developed by banks using UPI technology create a new QR (quick response) for every transaction. A customer then scans the code using his or her own application in to make a payment.

Another QR code-based payment solution, BharatQR, was jointly developed by Mastercard Inc., Visa Inc. and Rupay and was launched in February. It allows payments to a merchant without using cards and precludes the need for a point of sale unit. Around 20 banks are ready with the BharatQR service. “Once 30-35 banks are on board, we will see massive scale adoption by merchants,” said Asbe.

According to Asbe, some efforts are underway to integrate the BharatQR with the UPI. However, the NPCI is intent on popularising the use of the dynamic QR code function on UPI applications, he said.