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Post-demonetisation digital payments up, debit card use declines: Report

NEFT volumes have grown upwards of 30% with a further around 10% improvement in per-transaction size

IANS  |  Mumbai 

Post-demonetisation digital payments up, debit card use declines: Report

Investment banking firm on Monday said there is growth in digital payment mode by bank customers whereas there has been a decline in usage of debit cards.

In a report, also said the adoption for e-commerce has increased while the growth of credit cards has been secular.

The National Electronic Funds Transfer (NEFT) volumes have grown upwards of 30% with a further around 10% improvement in per-transaction size, resulting in around 40% growth by value, it said.

Similarly, the Immediate Payment Service (IMPS) is showing stellar growth on a smaller base.

"While growth has come off the low base, it still continues to grow at 100% plus. Instant payment, with ease of choosing the receiver and its 24x7 availability, makes it a very useful and attractive payment system," said.

According to the report, the usage of has been weak and the total transactions have seen a modest decline -- both in terms of value and volume.

"Card swipes are growing at sub-10% with no change in ticket size resulting in sub-10% growth in transaction value after a sudden spike during demonetisation."

"It would, therefore, seem logical that a remonetised banking system has started seeing more cash-based transactions and the is losing out," said.

On the other hand, the Unified Payment Interface (UPI) has seen a reasonable pick up with the government promoter BHIM mobile app (payment app) continuing to show a healthy growth in volumes.

adoption for e-commerce is fairly encouraging, according to is the domestic card payment system (similar to Visa and Mastercard).

"Total monthly spends have nearly tripled since demonetisation for transactions over POS (point of sale) while e-commerce spends have more than doubled. Considering cards were mostly provided during the financial inclusion drive, such trends are very encouraging."

Meanwhile, credit cards have seen a secular growth. Card spends have increased to 40% plus with a similar improvement in total transactions.

"Card outstanding contributes a fair degree of uplift to the overall unsecured loans within the retail portfolio. However, the revolver rates across banks continue to be flat and hence don't signify any immediate risk to default situation in this segment," said.

The central government had on November 8, 2016, announced the demonetisation of the Rs 500 and Rs 1,000 currency notes.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, September 25 2017. 17:07 IST