Indians are gradually shifting to online modes of payments with the volume of transactions massively peaking during the festive season, shows the annual Worldline India Digital Payments Report. Geographically, the shift is led by states like Maharashtra, Karnataka, Tamil Nadu and Delhi with major metropolitan areas in these states like Bengaluru, Chennai, Mumbai, Pune and Delhi leading among top cities.
India recorded a combined transactions value of over Rs 54 lakh crore in 2019 through four online payment modes — debit cards, credit cards, Immediate Payment Services (IMPS) and Unified Payments Interface (UPI).
Together, these four products recorded a combined transaction volume of over 20 trillion with UPI and debit cards being the most preferred modes of payment in terms of volume. In fact, UPI was the fastest product to hit 1 billion transactions-a-month in 2019 since its inception in August 2016. It recorded a substantial transaction volume of 10.8 billion in 2019, a YoY increase of 188 percent.
However, IMPS has attained the 'numero uno' position throughout the year followed by UPI in terms of value. Yet another major trend is that digital payment products are being primarily utilised for Person-to-Person (P2P) transactions than Person-to-Merchants (P2M) transactions.
Highest number of transactions in October
In 2019, October was the month with the highest number of transactions in volume and value, particularly on the two days of Diwali on October 26 and 27.
Among states, Maharashtra, Karnataka, Tamil Nadu, Delhi and Andhra Pradesh saw the highest number of transactions during the year while Bengaluru, Chennai, Mumbai, Pune, Hyderabad and Delhi were the top five cities.
Grocery, restaurants, petrol stations, apparel stores and speciality retail accounted for about 62 percent volume of transactions and about 39 percent value of transactions. Interestingly, jewellery stores accounted for only 1 percent of the total volume of transactions in merchant categories, but accounted for 8 percent of the total value of transactions.
The total number of cards in circulation in the country stood at 860.65 million as of December 2019 with debit cards' share at 94 percent in the pie.
What may be music to the credit card industry's ears and ahead of the SBI Cards IPO, credit card issuance witnessed a growth of over 10 million cards; from 45.17 million to 55.33 million in 2019.
What's even more encouraging from the credit card industry's point of view, despite just 6 percent share in total outstanding cards, credit cards accounted for 30 percent transactions in terms of volume and 51 percent in terms of value.
In terms of transaction value, debit cards stood at Rs 6.8 lakh crore while credit cards came in at Rs 7.1 lakh crore, registering YoY growth of 21 percent and 33 percent, respectively.
Another encouraging sign in the use of digital payments systems is the growth of the National Electronic Toll Collection (NETC), which jumped 162 percent to 370 million with a transaction value of Rs 80.6 billion, registering an increase of 57 percent.
Bharat BillPay's transactions saw a YoY growth of 133 percent in 2019 with transaction volume coming in at 125.5 million, worth over Rs 186.8 billion.In 2019, the total volume of AePS transactions (ONUS, OFFUS, DEMO
AUTH and eKYC) stood at 2.3 billion, achieving YoY growth of 12 percent. The
value of transactions achieved a milestone of one lakh crore in 2019 with
YoY growth of 31 percent.