Digital Payment transactions decline in May from March-April levels

Cash withdrawal through ATMs, transactions through NEFT and RTGS also decline

Transactions on Unified Payments Interface (UPI), the National Payments Corporation of India’s (NPCI) flagship payments platform, have dropped in May, marking the second consecutive month of decline in digital payment transactions, due to a slowdown in economic activities because of lockdowns in various parts of the country.

In May, UPI processed 2.53 billion transactions, down 4.16 per cent and 7.32 per cent from April and March, respectively. In value terms, UPI saw transactions worth Rs 4.9 trillion, down 0.66 per cent and 3 per cent from April and March, respectively.

In March, UPI had recorded 2.73 billion transactions amounting to Rs 5.04 trillion, the highest count ever since its inception in 2017. But, since then, both volume and value of transactions dipped, in sync with the rise in Covid infections in the country and the subsequent curbs imposed by the local administrations.

Last year, during a nationwide lockdown, imposed to curb the spread of the virus, digital payment transactions had shown a dip both in volume and value terms, however, recovered soon after as the economy started opening up.

This year, however, the dip seen in volume and value of digital payment transactions is not as bad as it was last year.

Immediate Payment Service (IMPS) recorded a 13.34 per cent drop in transactions in May as the volume of transactions dipped to 279.8 million. Value of transactions dipped 11 per cent month-on-month (MoM) in May to Rs 2.66 trillion.

Among digital payment platforms, FASTag has seen the maximum impact of the localised lockdowns in place to curb the devastating impact of the second wave of the pandemic. In May, FASTag recorded 116.4 million transactions, down 29 per cent and 39 per cent from April and March, respectively. Similarly, in terms of value, transactions worth Rs 2,125 crore was processed in May, down 23 per cent and 31 per cent from April and March, respectively.

Bharat Bill Payment Systems (BBPS), on the other hand, reported a significant jump in transactions with May seeing 39.2 million transactions on the platform, up 11 per cent from April and May. In value terms, transactions worth Rs 6,270 crore were processed on the platform, up 20 per cent.

Even transactions through Reserve Bank of India’s (RBI) National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS), which is used by businesses, have seen a decline. In May, NEFT transactions declined by 10 per cent to 256.5 million, amounting to Rs 18 trillion. RTGS transactions, on the other hand, saw a decline of 18 per cent to 12.3 million in May, amounting to Rs 83.66 trillion.

Cash withdrawals through ATMs have also seen a decline in the same period. In May, the volume of cash withdrawals fell 21 per cent to 250 million, worth Rs 1.07 trillion compared to 308.2 million withdrawals worth Rs 1.31 trillion. But, withdrawals through micro ATMs have seen a jump in volume as well as value. In May, withdrawals through micro-ATMs were 82.4 million, up 13.6 per cent from April, worth Rs 24,138 crore.