More and more Indians are now taking to digital modes of payments during the lockdown, but data by the central government reveals a stark difference in the adoption rate across states. Haryana, Uttar Pradesh, Andhra Pradesh, and Maharashtra have recorded the highest number of transactions per person, while others like Chhattisgarh, Jammu, and Kashmir, Manipur, Meghalaya, and Mizoram are lagging.
Chandigarh is at the lead here with 3.85 digital transactions per person, while Delhi averages out to 9.3 transactions per person. This data is according to the Digidhan Database that is maintained by the Ministry of Electronics and Information Technology. The database tracks digital transactions across National Payments Corporation of India operated channels. These include RuPay Cards, BHIM, and USSD-based mobile transfers over a cycle of twelve months.
As per digital payment industry executives, the grass-root campaigns in states like Telangana and Andhra Pradesh have contributed greatly to the rise in digital payments in these areas. From higher income levels to better internet, and from better banking infrastructure to a reliable power supply, there are a variety of factors that have led to this surge.
The most important of all is the accessibility to high-speed internet, says Harshil Mathur, CEO of RazorPay, which works with over 1 million merchants across the country. The most number of transactions have been recorded from Maharashtra, Karnataka, and Telangana in the three months since the pandemic struck.
Andhra, Haryana, UP, and Maharashtra led the series with the highest per capita transactions of 17.6, 12.4, 7.7, and 6.9 respectively.
However, states that have limited internet access and high rural populations are facing multiple challenges in moving from cash transactions to digital ones, as per industry and government data.
There stand various differentiators at the state level. These include higher per capita income, familiarity with the English language, banking and financial infrastructure, faster internet services, better communication facilities, and a 24x7 power supply.
The database does not offer a periodic comparison between the months, but as per experts, the surge in digital payments is a feature that has been prevalent since the pandemic.
As per NPCI, several channels like UPI, Bharat Bill Payment System, and IMPS have recorded volumes in June and July. The channel recorded 1.5 billion transactions worth INR 3 lakh crores in July, which is a jump of 15 percent from the pre-COVID levels; when just 1.32 billion transactions were recorded in February, which totaled to INR 2.3 lakh crores.
With the increased use of online bill payment facilities, a sharp rise in transactions from tier II and tier III towns has been observed. 70 percent of transactions come from these towns and cities. Top cities include Indore, Aurangabad, Surat, Nagpur, Patna, Guntur, Vijayawada, and Kurnool. PhonePe saw the most transactions from states like Bihar, Karnataka, MP, Odisha, Rajasthan, Karnataka, UP, West Bengal, and Telangana.