Transaction volumes recorded on channels such as Unified Payments Interface (UPI), Immediate Payment System (IMPS), Bharat Bill Payment System and National Electronic Toll Collection (NETC) inched towards pre-covid levels signifying a slow revival in commercial activities and early signs of consumer appetite to spend.
(Economic Times, June 1)
Parv Sharma's key takeaways:
- Looking more closely at the numbers, May’s rebound is encouraging, at least for digital payments.
- Clearly one of the major drivers is no one wants to be touching cash, which has become “the new Typhoid Mary”.
- But a lot of hurdles still remain. For example:
- Cultural resistance – many people still don’t trust or understand digital.
- Retailers still prefer cash, whether for tax reasons or otherwise.
- Illiteracy is high (26% vs 3% in China, for example) and this correlates to smartphone usage. It could also disproportionately impact take-up outside metros.
- Nevertheless, ecosystem players are in place, the opportunity is huge, and, importantly, the country’s open digital payments infrastructure is robust, fair and enjoys low barriers to entry.