NEW DELHI: Demonetisation was a godsend for fintech firms, especially mobile wallets and other transaction-focused enterprises. Transaction volumes and values shot up several times, for all modes of digital payments. However, post-March 2017, the growth in digital transactions slowed and the amount of cash with the public has steadily risen.
According to data available with the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI), the total value of electronic transactions in November 2016 stood at Rs 94 lakh crore. That number skyrocketed to Rs 149.58 lakh crore in March 2017.
But then the growth in digital transactions slowed significantly during the following months. In April 2017, the total value of electronic transactions fell to Rs 109.60 lakh crore, and then to Rs 107.38 lakh crore in July 2017. September saw a brief revival, improving to Rs 124.70 lakh crore, but for October (as of October 29), the number came down to Rs 99.28 lakh crore.
While not as pronounced as the slowdown in value growth, digital transaction volumes too have fallen from the post-demonetisation highs: from 957.5 million in December 2016 to 877 million in September 2017. To be noted, however, is the average ticket size of transactions, which has steadily fallen over the last year. Experts say that this is one sign that digital transactions have become more widespread — with people adopting online transfers for smaller amounts.
In contrast, RBI data shows that the amount of currency with the public, which had stood at Rs 17.01 lakh crore just before demonetisation was announced, is nearing its older levels. For September 2017, the number stood at Rs 15.33 lakh crore — after having fallen to as low as Rs 7.81 lakh crore as of December 9, 2016.
Total value of electronic transactions:
A deeper look into the breakup of different modes of electronic transactions also show a moderation in growth for select technologies. The most prominent among those is mobile banking, where volume of transactions has gone from 72.3 million in November 2016 to 86.3 million in September 2017, but values have fallen below their older levels. The total value of mobile banking transactions have come down to Rs 1.12 lakh crore in September 2017, from Rs 1.24 lakh crore in November 2016.
Both RTGS and NEFT transactions peaked in March, 2017, at Rs 123.37 lakh crore and Rs 16.29 lakh crore respectively, but have since fallen to Rs 102.34 lakh crore and Rs 14.18 lakh crore in September. Steady, uninterrupted growth has only been recorded in the case of IMPS, UPI, Card transactions at PoS terminals, Prepaid Payments Instruments (PPI, which include mobile wallets).
However, most of these segments started off with a very low base. IMPS volumes, for example, have grown from 36.2 million to 82.9 million between November 2016 and September 2017, but still account for only a fraction of established modes of payment like NEFT. UPI, PPI and USSD-based payments, despite growing, still only accounted for Rs 5,290 crore, Rs 2,760 crore and Rs 3,235 crore worth of transactions in September.