Has the Centre’s demonetisation move nudged people towards more digital payments? While the month-on-month data displayed mixed trends, making it difficult to draw a conclusion, mobile transactions appear to be on a buoyant trend.
According to the latest data put out by the RBI (Electronic Payment Systems updated as on June 27, 2017), mobile banking transactions that averaged Rs 1-1.1 lakh crore a month (in value terms) pre-demonetisation, and shot up to Rs 1.3 lakh crore in December 2016, has been on the rise over the past three months. In May 2017, the value of mobile banking transactions stood at about Rs 1.9 lakh crore. Interestingly, the value per transaction has been increasing steadily from about Rs 14,000 pre-demonetisation to nearly Rs 30,000 in May. So far in June, mobile banking transactions have totalled about Rs 92,000 crore (but this being provisional data could undergo revision).
Instant transfer of money through Immediate Payment Service (IMPS), has also shot up post-demonetisation. IMPS, facilitated though the NPCI (National Payments Corporation of India) offers instant, 24X7, interbank electronic fund transfer through mobile phones, though also extended through other channels such as ATM, Internet banking, etc. From about Rs 34,000 crore (in value terms) in October 2016, IMPS transactions went up to Rs 43,000 crore in December 2016. The uptrend continued in the following months, with such transactions totalling around Rs 58,000 crore in May 2017. So far in June these transactions have totalled nearly Rs 50,000 crore.
The otherwise commonly used electronic fund transfer -- National Electronic Funds Transfer (NEFT) -- has also seen a steady uptick, averaging about Rs 12 lakh crore in the past two months, from nearly Rs 10 lakh crore levels pre-demonetisation.
Back to cash
While some of the digital transactions have shown an uptick, usage of debit and credit cards at POS that shot up in the month of December 2016 due to the cash crunch, has dwindled to pre-demonetisation levels in recent months. From around Rs 52,000 crore (in value terms) in December 2016, such transactions have fallen to about Rs 45,000 crore in May 2017 (about Rs 35,000 crore in June so far). With cash withdrawals at ATMs easing up since February, people appear to have moved back to cash purchases. According to the latest data on payments indicators (in RBI monthly bulletin), usage of debit cards at ATMs, which was around Rs 2.2–2.4 lakh crore (in value terms) a month, pre-demonetisation, trickled down to about Rs 84,000 crore in December 2016, but went back to Rs 2.2 lakh crore levels by April 2017.
Transactions under the Unified Payments Interface (UPI), a recent addition to the digital payments arena, has seen an uptrend on a low base.