Record transactions worth Rs 5.99 lakh crore via mobile apps in June
By Ashwin Manikandan
The volume and value of transactions in June are significantly higher than mobile transactions recorded in February. More Indians used their mobile phones to make payments and to transfer funds in June, than in any previous month since the Reserve Bank of India started recording such data in July 2011.
A total of 1.66 billion transactions worth Rs 5.99 lakh crore were processed by various mobile-based banking and payment applications in June, at a time when most bank branches were either shuttered or operating with reduced strength, according to the latest RBI data. The volume and value of transactions in June are significantly higher than mobile transactions recorded in February -- before the Covid-19 pandemic -- when 1.42 billion transactions worth Rs 5.25 lakh crore were processed.
The previous record for most mobile banking transactions in a single month was in July 2019, when 1.17 billion transactions worth Rs 5.33 lakh crore were processed, the central bank data showed.
These transactions include those made through mobile apps such as Google Pay and PhonePe under the Unified Payments Interface (UPI) railroad, Paytm and Amazon Pay for e-wallets and banking apps such as SBI Yono and Kotak 811, among others. According to experts, the data reflects the increased dependence of Indians on smartphone-based payment solutions, which are by nature contactless and in line with the new hygiene and social distancing protocols.
Transaction volumes on traditional payment channels, such as those through debit, credit and net banking instruments, were subdued in June due to muted commercial activity and is reflected in the central bank data as well.
“UPI payments have grown while debit card payments are down. There is a marked increase in mobile account to account (A2A) payments adoption, which has been sustaining over several months,” said Vijay Mani, partner, Deloitte India. In June, only 430 million card transactions worth Rs 1.05 lakh crore were processed both on debit and credit instruments issued by banks.
Separately, experts said the new categories of spending on smartphones -- such as settlement of monthly bills and domestic wages -- at a time when stepping out was seen as risky, could have also led to the surge.
“It was the perfect solution for users,” said Shilpa M Ahluwalia, partner – fintech, at law firm Shardul Amarchand Mangaldas.
“With most people avoiding visits to bank branches and ATMs, mobile phones would have become the most convenient channel to make the payments for essential goods and services,” she said. Meanwhile, most leading digital payment firms such as Google Pay, Paytm and PhonePe have told ET that new customer additions on their platforms rose significantly than during the pre-Covid-19 months.
Experts also said that the meteoric growth and adoption of channels monitored by the National Payments Corp of India such as UPI, and the increased convenience of using smartphone-based payments could result in the trend continuing in the months ahead. “That increases the likelihood of stickiness. It is interesting that economic contraction has affected card payments, but not mobile A2A. These are mostly remittances, but also have a significant merchant payment share,” Mani added.
For instance, UPI alone clocked about 1.33 billion transactions worth Rs 1.61 lakh crore in June, registering record volumes at the time.
To be sure, transaction volumes on the channel in July and August, too, have recorded new highs, indicating that the trend towards smartphone-based payments is likely to stay.