HYDERABAD: While the Reserve Bank of India’s (RBI) ‘Electronic Payment Systems Data’ for the period between November 2016 and January 20 this year shows a steady increase in the volume and value of digital transactions, the retailers and merchants say demand for payments done through payment gateways such as Paytm has been reduced.
The RBI data shows that there has been 2.6 million in volume transactions amounting to 9.8 billion rupees in transaction value until January 20. This is the highest, Unified Payment Interface (UPI) transactions has achieved so far.
With the improvement in cash flow from the RBI to the banks and ATMs across the city, the spending power of the common man in liquid cash in Hyderabad appears to have improved for the first time in months since demonetisation. Subsequently, the volume of transactions done using payment gateways has considerably decreased.
Stark contrast
But the trend on the ground is in contrast to the RBI numbers, with customers preferring to use cash instead of digital payment gateways.
Dinesh Singh, a kirana shop owner at Begumpet had set up a WiFi connection, sharing it with another shopkeeper, to enable customers to perform transactions using Paytm. Both shopkeepers noticed a significant reduction in the number of e-wallet transactions this month.
“But very few people are now making payments using Paytm. The cash situation is back to normal and everyone is paying through cash. In December there would be at least 30 to 40 people who would pay using Paytm in a day. These days it is just three of four people,” said Dinesh.
There have been very few enquiries about Bharat Interface for Money (Bhim) app so far, he added. Bhim, the government’s own Unified Payment Interface (UPI) app released on December 31, 2016, is slow to capture the payment gateways market. However, transactions are done over UPI also show a steady increase in both volume and value from November.
“The main reason why people just do not want to use payment gateways is because of the time is taken for the transaction. It takes a long time to do a single transaction if the network is a little bad,” said Mohammad Yaccub, owner of Green Mini Mart supermarket at Begumpet.
Paytm to launch its payments bank
Paytm in December had declared that they were witnessing four times more transactions since demonetisation in south India alone. The company is also expected to launch their payments bank as early as March this year. The RBI has so far approved 11 private players to set up payments bank. Airtel had launched India’s first live payments bank. Paytm is the second such player to launch the service in the country.