Jan 14 2023


Post Demonetization, Plastic Transactions Jump 25% Per Month

Post Demonetization, Plastic Transactions Jump 25% Per Month

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Post Demonetization, Plastic Transactions Jump 25% Per Month
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Post Demonetization, Plastic Transactions Jump 25% Per Month
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By Pratik Bhakta, Published on Dec 27, 2016,
Plastic transactions have surged approximately 25% per month since November 8, following the demonetization drive and the government’s concerted efforts, spearheaded by Prime Minister Narendra Modi, towards promoting a predominantly cashless economy. This surge in digital transactions has been evident across various segments, with card payments experiencing significant growth in organized retail establishments. Moreover, even small roadside vendors and merchants have begun embracing digital payment methods, reflecting a broader shift towards cashless transactions.

“From month on month, now we are checking weekly growth data which is showing a jump of around 5% per week, which is a very healthy number, “said Lakvir Kapoor, chief executive officer at Pine Labs, which facilitates installation of point of sale (Po’s) terminals at merchant outlets. “The average value of each transaction which had slipped to `. 2,000 from `. 2,700 before November 8 has now stabilized at that level. “

Pine Labs is processing around 1.1-1.2 million transactions on an average per day after the withdrawal of ` . 500 and ` . 1,000 notes. Before November 8, the number was around 5 lakh on an average weekday.

The number has picked up in recent days. “We did 2 million transactions last Sunday; this Sunday being Christmas, we saw 2.2 million transactions on our network which is a healthy 10% jump,“ said Kapoor.

While Pine Labs works mostly with organised retail outlets, companies such as PayU India and mSwipe concentrate on mom-andpop stores and quick service restaurants. These companies are also reporting a pick-up in business.

“We are mostly prevalent in smaller cities like Jaipur and Chandigarh and are operating 10,500 PoS terminals presently . Now, our call centre is flooded with queries from merchants who wish to accept digital payments; we received an order of 3,000 terminals over the past one month,“ said Jitendra Gupta, managing director, PayU India.

Gupta said that the number of transactions per day has grown sixfold since November 8. In terms of value, the rise is fourfold. He said that with first-time users trying card payments, there was a fall in the success rate of transactions in the middle of November. “12-15% were first-time users & they were unable to make the payment at one go,“ said Gupta.“Now things have stabilised.“ India has around 15 lakh PoS terminals, almost 74 crore (740 million) debit cards & 2.7 crore (27 million) credit cards. This data does not refer to wallets which are a parallel network.

These mobile wallets too have started reaping the benefits of demonetisation. Paytm, India’s largest mobile wallet service provider, has more than 15 lakh offline merchants who accept payments through its platform. The total number of wallets for Paytm is at 17 crore.Post November 8, the number of wallets are increasing by up to 5 lakh per day. Also the number of transactions rose to 70 lakh from 25 lakh per day before demonetisation was announced.

MobiKwik, another major wallet provider, said number of users grew to 4.5 crore from 3.5 crore and merchants accepting MobiKwik for payments have in ents have in creased to 10 lakh from 1 lakh for Novem ber. Card processing companies and banks have up graded the ir band ss the rising width to process the rising number of payments.

The PoS industry is looking at a huge push at merchant acquisition, though they remain wary that the growth might not be sustained once cash comes back into circulation.

“I believe it will take around 18-24 months of consistent push from the authorities in order to bring about a behavioural shift in Indians. The habit of making payments through cash has to change so that people even make card transactions for small purchases,“ said Manish Patel, founder of mSwipe.

Source: http://www.adageindia.in/marketing/news/post-demonetization-plastic-transactions-jump-25-per-month/articleshow/56199936.cms

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