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Online transactions on the rise in India
October 25, 2017
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NEW DELHI: Online banking transactions on the rise in India, but cash is still the king, said experts. “Almost a year down the line, is Prime Minister Narendra Modi’s dream of making India a cash-less or less-cash country becoming a reality?”, they asked.

Industry stakeholders feel that though the note-ban drive by the government gave the necessary impetus to citizens to start adopting online payment platforms, a lot needs to be done by both the government and the industry to make it a success.

The adoption rate of online platforms was high during the demonetisation period, but it plateaued out as soon as cash became available in the system.

When the the Modi government banned high denomination notes of Rs500 and Rs1,000 notes on November 8 last year, removing an overwhelming amount of cash from the economy, people had to willy-nilly fall back on plastic or online transactions.

“The fact that 86 per cent of the cash available in the system was sucked out overnight gave an immediate boost to online/mobile payment platforms. There was a push-up factor,” Vishwas Patel, co-chair, Payments Council of India (PCI) and founder and CEO of CC Avenues, told IANS.

But once cash was back in circulation, those who earlier dealt mostly in cash went back to doing so, he said.

The PCI was formed under the aegis of Internet and Mobile Association of India in 2013 to cater to the needs of the digital payment industry.

He said during November, December 2016 and January 2017, online transactions were at their peak. In October 2016, debit card transactions stood at Rs21,941 crore and those of credit cards at Rs29,942 crore. Post-demonetisation, in December 2016, debit card transactions jumped to Rs58,000 crore and those of credit card were at Rs31,150 crore.

DEBIT, CREDIT CARDS

However, in August 2017, 10 months after the note ban, debit and credit card transaction stood at Rs36,000 crore each, having come down substantially from the heights they achieved, but not falling back to the pre-demonetisation lows.

The database details would be circulated amongst payment gateway service providers, banks and card companies. “We are also working on a trust certificate that can be displayed by all merchants on their websites,” Patel added. Online transactions are bound to grow over a period of time, but in a country which overwhelmingly ran on cash, it may be difficult to do a quick digitisation.

Vineet Singh, Chief Business Officer at Mobikwik, a payment app, said demonetisation had became a force multiplier. “It has pushed India a decade ahead towards the agenda of adopting online payment platforms. Naturally, things cooled down a bit post-demonetisation,” Singh told IANS.

Mobikwik had 3-3.5 crore users in the pre-demonetisation days and a year after note ban it has 6.5 crore. The company also witnessed a sharp rise in transactions from one million to three million within a year.

“Online payment companies in the last one year have increased their base significantly. They are experiencing healthy month-on-month growth and the adoption of online payment platforms was across all age groups,” Singh said, adding that “now everybody takes online payment seriously, which will provide a secular road towards a cash-less society.”

Indo-Asian News Service

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