Outlook Money|June 2020
There is no doubt that the global pandemic and the ensuing lockdown has crippled economies and changed the way people lead their lives. While the number of transactions have reduced drastically during this time, the way these transactions happen has also undergone a sea change. This leads to the question whether digital transactions are going to become the new normal post-COVID.
Many experts believe that while digital payments were already on a rise before the pandemic, the health crisis has given further push to people adopting digital tools to avoid handling of cash. It has also resulted in fewer possibilities to deal in cash. However, there is still a large segment, which relies on cash amid all this and many believe that cash would continue to remain the backbone of the Indian economy for a long time to come.
However, there is agreement on one thing: that once the recovery starts, there is going to be a new normal across the board and digital payments space is going to be no different. According to ‘India Digital Payments Report - Q1 2020’, issued by Worldline India, social distancing is going to influence, to some extent, how the landscape of digital payments will pan out particularly in the physical space, given it is a high contact area.
While the COVID-19 pandemic has impacted businesses across verticals and has upended daily life, the cash flow cannot be halted because of the virus outbreak or the subsequent lockdowns. This has resulted in increased adoption of digital payment solutions at an unimaginable pace throughout the country, says Rohit Kumar, CEO and CMD, Xpay.life.
“Digital payment platforms are flourishing with the rise in adoption. The RBI, National Payment Corporation of India (NPCI), along with government bodies, banks, financial institutions, and regulatory authorities, are already teaming up to quicken the process of digital payment adoption in the country. Though different economies are at different stages across the world, the COVID-19 has definitely cleared the road for digital payment methods in India,” he says.
The shift towards digital payments in India is particularly striking when the evolution of consumer behaviour can be seen among different segments, including older consumers who have traditionally preferred cash for transactions. According to a recent study by Capgemini, 80 per cent of consumers in India in the age group of 50 to 60 years will use digital payment methods the most, followed by the age group of 36-45 years at 83 per cent. XPay.Life, which simplifies payment for utility bills among tier-two, three, four and five consumers, has seen a surge of 500 per cent in recurring utility bill payment through its app, Kumar adds.
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