Digital payments were 10.2 per cent lower by volume and 7 per cent lower by value in January 2017 against December 2016, according to representative data released by the Reserve Bank of India (RBI).
The number of digital transactions fell from 1,027.7 million in December to 922.9 million in January. In value terms, the number declined from Rs 105.4 lakh crore in December to Rs 98 lakh crore in January. This data included transactions on credit and debit cards, electronic fund transfers, digital wallets and mobile banking transactions.
started releasing representative data on payment systems on a daily basis since December 2, 2016. This comes after the government had announced the note ban on November 8.
The data capture card transactions of four banks, prepaid instruments from eight non-banks and mobile banking figures from five banks. It is not definitive as all banks are not included, but the data indicate a trend.
Within digital transactions, debit and credit transactions at point-of-sale terminals declined 18.6 per cent month-on-month (m-o-m) in January, indicating some people’s preference for cash. Mobile banking transactions declined 7.6 per cent month-on-month.
However, there was an uptick in other modes of digital payment
in January. For example, the Immediate Payment Service (IMPS), used to transfer money in an instant, saw 18 per cent increase in volumes in January. Similarly, the Unified Payments Interface (UPI) of the National Payments Corporation of India was seen gaining traction. In November, only 0.3 million transactions happened through UPI. In December, the number of transactions rose to 2 million and in January, it was 4.2 million. The values transacted were Rs 91 crore, Rs 700 crore and Rs 1,666 crore, respectively, said the NPCI data shared with RBI.
Value and volume changes in pre-paid instruments, which largely comprise mobile wallets, were flat.
There were restrictions on cash withdrawal in January, but the situation was not as bad as in December. RBI
Governor Urjit Patel told a parliamentary standing committee that by January 18, the central bank had remonetised 60 per cent of the cash scrapped on November 8. The RBI
had by that time put back into the system Rs 9.2 lakh crore of the Rs 15.44 lakh crore demonetised.