The coronavirus outbreak may finally accomplish what India’s shock demonetization four years ago failed to achieve: Use of digital payments is soaring for everything from groceries, electricity bills and cab fares.
The value of transactions on the Unified Payments Interface, a platform created by India’s largest banks in 2016, reached an all-time high last month as people feared to handle banknotes amid the pandemic. Electronic fund transfers from banks, which had dropped in April as economic activity slowed almost to a halt, have also rebounded.
“People who have never paid a bill online are paying online, people who have never bought groceries online are buying online,” said Nityanand Sharma, chief executive officer of Get Simpl Technologies Pvt Ltd., which allows people to order groceries and food online and pay every two weeks. “What would have taken five years has happened in the last three months.”
Prime Minister Narendra Modi’s government has long sought to push digital payments for India, where three in four consumer transactions are handled in cash. In November 2016, Modi suddenly invalidated most of the country’s high-value currency notes — a move aimed at curbing corruption that would also, he later noted, help encourage a move toward digital commerce.
Digital payments initially did surge as people struggled to get banknotes, but they reverted to cash as the amount of notes in circulation rose again. Now the pandemic, which has made people wary of close personal interactions, is giving online payments a fresh boost.
The Story has been carried from Bloomberg.
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