RBI numbers show drop in digital commerce, but firms talk of record growth

It said that transaction value of top eight players was around Rs 1,320 crore during the month

It seems like a battle of numbers between the Reserve Bank of India and the world of digital cash players. While the  RBI numbers suggest a decline in digital transactions after demonetisation, digital wallet and payment companies argue that the central bank has failed to capture the full universe.

This is how it played out.

RBI gave out the number of transactions and transaction value details of eight prepaid payment instruments (PPIs) which includes mobile wallets, smart cards, online bank accounts for the month of November. It said that the transaction value of top eight players was around Rs 1,320 crore via 59 million transactions during the month.

However, mobile wallets such as Paytm, Freecharge, Mobikwik, Oxigen and some others have claimed big numbers in the same period, pegging the growth at 300 per cent over the previous months. 

RBI has counted the e-commerce transactions, while not taking into account the transactions via money transfer, said an analyst explaining the discrepancy between the two sets of data. In fact, RBI footnote at the end of the November data says the figures were a collation for goods and services transactions of top eight players (not specifying names).

The RBI numbers for the previous months of September and October seem to be for the complete digital ecosystem (money transfer as well as e-commerce) and that is why those are higher at around Rs 6,000 crore, according to an industry expert. 

“The whole digital money sector is worth around Rs 6,000 crore, out of which Rs 4,500 crore comes via money transfer and the rest through ecommerce. I think the money transfer bit has not been taken into account in the November data,’’ said Naveen Surya, Chairman, Payment Council of India and MD, ItzCash. 

Even in ecommerce transaction, there has been an increase as the value has gone up from Rs 1,000 crore in October to Rs 1,300 crore in November, Surya added. 

Mobile wallet players have also said that the real picture would be out by end of December when the whole data gets collated. “We are surprised RBI gave out this data, this is incomplete. Things are way brighter in the mobile wallet world than the picture painted,” said a senior executive of one of the largest digital wallet companies in the country.

Experts also said that there was a rise in the number of transactions in the month of September and October owing to the festive season. The cashbacks and discounts pushed big ticket purchases via mobile wallets, they explained. 

After demonetisation, while the number of transactions and users of mobile wallets increased, the average transaction size went down, owing to people being wary of spending and wallets being used to buy smaller ticket size items as cash transactions went down. However, there were contrarian voices too. Some wallet players warned against the inflated numbers being projected by rival companies and said that the real rise would come in the next six to 12 months.

“The industry has to be careful about throwing out random numbers, we have to be a little cautious. This is a long term opportunity for us and we think the usage of wallet will rise over the next six to 12 months,” said Bipin Preet Singh, cofounder of MobiKwik.