The National Payments Corporation of India’s UPI, IMPS and FASTag, and the Reserve Bank of India’s NEFT and RTGS, which is used by businesses, saw sharp declines in both the volume and value of payments processed. Withdrawals from ATMs – a proxy for cash spends – also saw a drop.
The only two modes that saw volumes grow in May were NPCI’s Aadhaar Enabled Payments System (AePS) – the key rail for the government’s direct benefit transfers and sustenance payouts – and the Bharat Bill Payment System (BBPS), which is used for automated bill settlement online.
Experts said that the monthly decline in digital payments, despite their increased adoption during the pandemic, reveals the extent of Covid’s impact on consumer sentiment.
Another area of concern is the decline in business payments through NEFT and RTGS. The former is primarily used by businesses for salary payments.
The volume of National Electronic Fund Transfer (NEFT) transactions fell by 10.3% in May to 256.5 million settlements, worth Rs 18.19 lakh crore, from 286 million transactions worth Rs 20.46 lakh crore in April. Real Time Gross Settlement System (RTGS), which is used for large commercial payments between businesses, registered an 18% fall in May to 12.3 million settlements, worth Rs 83.66 lakh crore.
ETtechIndia’s most popular digital payments platform, UPI, also saw a 5% decline in volume in May, the data showed. UPI logged 2.53 billion transactions worth Rs 4.9 lakh crore in May, down from 2.64 billion transactions worth Rs 4.93 lakh crore in April.
Other popular payment modes used by consumers for bank transfers and retail transactions, such as Immediate Payment Service (IMPS) and FASTag, also registered a monthly decline. While IMPS volumes fell by 15%, FASTag, which is used for automatic toll collections, fell by as much as 41.3% in May.
Debit and credit card payments at shops also fell during May as commercial establishments were shuttered in nearly all states.
The number of credit card payments at point of sale terminals fell 20.9% from April, while that of debit cards fell 25%.
ETtechCash withdrawals at ATM points also recorded a slump. The number of withdrawals fell by 21% in May to 250 million, worth Rs 1.07 lakh crore, from 302 million worth Rs 1.31 lakh crore in April. Interestingly, micro-ATM withdrawals saw a growth of 13.6% over this period. This is because most micro-ATMs are powered by AePS and function as subsidy points in rural and semi-urban India.
A total of 82.4 million micro-ATM transactions worth Rs 24,138 crore were recorded in May, up from 72.5 million transactions worth Rs 21,700 crore in April.
