Digital transactions made a giant leap in a year

The country has made a rapid progress in terms of going digital as far as payments is concerned over the last one year post scrapping of old Rs 500  and Rs 1,000 notes in November last year.

The recent data from the National Payments Corporation of India (NPCI) shows that the mobile banking transactions have grown 19.3% to 863 lakh by end of September 2017 from  723 lakh transactions in November 2016.

In the case of the Unified Payment Interface (UPI) transactions, it has shown a phenomenal jump of 107 times to 308 lakh transactions from  2.87 lakh transactions in November 2016.

According to NPCI data, electronic payments systems including RTGS, NEFT, IMPS, CTS, USSD, NACH, UPI, PPI, debit and credit card at POS, have increased from 67 crore transactions in volume and Rs 94 lakh crore in value terms in November 2016 to 87 crore in volume and Rs 124 lakh crore in value in September 2017.

The giant leap in digital transactions have benefited many e-wallet companies like Paytm, and also FinTech companies.

Wallet major Mobikwik has doubled its subscriber base to 65 million users post demonetisation.

Upasana Taku, co-founder, Mobikwik says, over the past one year, the industry has grown over 55% and has added 150 million users in the e-wallet platforms, along with 10 million merchants.

"At present, we are witnessing close to 30 lakh transactions every day," she said.

Recently, the company has partnered with Bajaj Finserv Limited to develop an EMI wallet through which customers can avail credits and loans. Bajaj Finserv-Mobikwik wallet is also the first credit wallet, she adds.

Mobikwik's frequency for active users grew by 100% and gross merchandise value (GMV) grew to $2 billion and slated to go up to $10 billion.

"Over 25% transactions come from semi-urban and rural users and 75% of our users are millennials," Taku says, adding, "By 2020, we envision that majority Indians will make their mobile as bank and do the entire suite of financial transactions like investments, loans/EMI, insurance, cross-border remittances in addition to making basic payments."

The country's fifth largest private sector bank YES Bank recently launched a superior payment wallet services BHIM YES PAY by fully integrating the application with all the IndiaStack APIs and NPCI Products.

The bank has over 5.5 lakh registered users on BHIM YES PAY and more than 2 lakh users have already availed either UPI or Virtual Card Services to carry out P2P payments and online shopping. Since launch, the bank has witnessed over 2 million transactions valuing close to Rs 70 crore. Ritesh Pai, Chief Digital Officer, YES Bank says, "We will soon launch FastTag, which will facilitate easy toll payments and look forward to widespread adoption of the digital payment products."

During demonetisation period, digital lending also witnessed a significant growth. Manav Jeet, MD and CEO of FinTech company Rubique, says, "At Rubique, we have seen approximately 30% growth in credit card applications during the last year."

The growth rate of the digital payments industry which was earlier in the range of 20-50% has accelerated post demonetisation to 40-70%, informs Payments Council of India Chairman Navin Surya.

"However, demonetisation is just one of the milestones towards our country's cashless journey and not the final destination. It conveyed a strong psychological message to our countrymen that cash is not welcome and digitisation of cash is inevitable. This also resulted in doubling of the number of PoS machines in just one year which was one of the weakest links prior to demonetisation," he says.

The insurance industry too witnessed a sharp rise in online payment. "Soon after demonetisation, the industry witnessed a sharp spike in cash payment of premiums but over time we have seen even households from Tier-II cities that preferred cash getting comfortable with NEFT and ECS mandate. This huge behaviour change has significantly improved contactibility and will reduce unclaimed funds," says Karni  Singh Arha, Chief Financial Officer of Aviva Life Insurance.

Dewang Neralla, MD & CEO of    Atom Technologies said demonetisation was a big boon for India's cashless and digital agenda.  

Atom saw an over 3X growth in the last one year. "Before demonetisation, we were processing monthly transactions of Rs  3,000 crore  which now stands at Rs 6,800 crore  across all our verticals. The major contributor to this growth was our online payments business.  Payment processing volumes have grown three times to what they were since demonetisation," he said.

According to him, the two major technological advancements which will drive the industry going ahead are Artificial Intelligence and Machine Learning. AI and ML will transform the overall generation of payment technologies right from analytics to on demand payment processing aside to changing the shopping behaviour. It will help study the consumer patterns to rollout better financial products for them, he adds.