Digital transactions show signs of rising

Digital transactions are showing some stickiness, as indicated by the representative data of a select few large banks, published daily with a lag of a week, and by the transactions published with a two-month lag. 

Digital transactions peaked in December 2016, just after demonetisation was announced. Since then, transactions seem to have come down a little. However, compared with the pre-demonetisation period, digital transactions have taken off substantially. 

For this analysis, Business Standard took a look at some key indicators — Immediate Payments Service (IMPS), which allows payments on a real-time basis through computers or mobile phones; card (debit and credit) usage at point-of-sale (PoS) machines; mobile wallets and mobile banking. All banks’ data for these were available only till May. 

However, the representative data for a select few banks also indicated that digital transactions have increased from the level seen before demonetisation, announced on November 8. This is a good indicator of stickiness in digital transactions. 

The total value of IMPS transactions in September 2016 was at Rs 28,912 crore. In May, the figure was Rs 58,559 crore, a growth of 102.5 per cent. Similarly, card transactions at PoS in the period increased 135.4 per cent to Rs 37,508 crore. Mobile wallets increased 125 per cent to Rs 7,194 crore, while mobile banking rose 104.6 per cent to Rs 2,13,307 crore in May 2017, from September 2016. 

The same trend was visible using daily representative data, if the pre-demonetisation period was considered. State Bank of India’s Group Economist Soumya Kanti Ghosh said comparing data with that of December would be wrong and the actual comparison should be done from the pre-demonetisation period. 

Comparing the daily data to come to a conclusion is “grossly unfair” as it is a “sample representative of the banking industry and not the whole industry data to decipher progress in digitisation,” Ghosh said in a report.

Electronic Payment Systems — Representative data (updated as on July 11, 2017) — volume in million