Digital payments in India rise as consumers stay home
Digital payments in India have risen by 10 per cent over the last month, despite a 30-per-cent decline in online travel spending.
According to payments platform Razorpay, as human interactions are reducing across the country, consumer payment habits are changing. “For the first time ever, online grocery shopping climbed the ladder with a growth of 9 per cent, and government and utility bill payments grew by 30 per cent, reflecting precautionary measures that customers are taking by staying indoors,” the company said in a statement.
Advisories against overseas travel and the closure of borders by a growing number of nations has led to a significant reduction in travel from India. Last year, according to Statista, the travel sector accounted for 40 per cent of digital payments in India.
Correspondingly, digital payments for hospitality services, which typically account for 10 per cent of payments processed by Razorpay, fell by 12 per cent over the last month.
Consumers fearful of running out of essential supplies during the coronavirus crisis saw the grocery category move into the top three sectors on the platform, growing 9 per cent.
UPI (19.6 per cent), NetBanking (11.5 per cent), and Wallets (10.3 per cent) became the three leading modes of payments during the pandemic.
“From a macroeconomic perspective, we are seeing an increase in the demand for digital payments across a few sectors – grocery, e-commerce and utility bills have gone up, given the social isolation,” said Harshil Mathur, CEO, and co-founder at Razorpay.
“On the flip, people are having to stay indoors and not having enough spending power, this can make the overall consumer spending go down creating a lasting (negative) impact.”