by Syed Fasiuddin

The Aadhaar Enabled Payment System (AePS) saw a 96% uptick in usage by volume during the lockdown, according to a study by hyperlocal FinTech PayNearby. A further rise of 27% was recorded in the value of these transactions, said PayNearby, in tandem with the imposition of a nationwide lockdown as part of efforts by the Government to curb the spread of COVID-19.

PayNearby attributed the rise, in both volume and value, due to funds disbursed by the Government as part of its Direct Benefit Transfer (DBT) programme, mainly in rural and semi-urban areas, which witnessed a growth of 61% and 60% in transaction volumes, respectively.

Transaction volumes of assisted digital transactions saw an uptick of 45% in the lockdown period, whilst however witnessing a dip in the average ticket size, which was attributed to paranoid consumer sentiments, a reduction in the purchasing power, as well as smaller ticket withdrawals. As the country opened up by August, the gross transaction value by average grew by 17%; whilst transactional volumes dipped by 7%. "It was reflective of revival of money transfer, travel and utility payment businesses, and signified a return of larger ticket size transactions," commented PayNearby on the trend.

Notably, in tandem with the mass migration of workers from urban to rural areas of the country in the first phase of the nationwide lockdown, money sent through Domestic Money Transfer (DMT) fell sharply by 85% in the first two months, only to pick up later in July. "With the advent of the unlock phase, the remittance business saw a V shaped recovery and registered a growth of 106% and 100% in value and volume respectively vis-à-vis during lockdown," added PayNearby.

It was further revealed that utility bill payments, through kirana stores, also saw a drop of 23% during the lockdown, which later increased to 67% in terms of volume as the country implemented various measures to open up the economy. Almost 48% of all transactions at kirana stores were registered between 7AM and 2PM, whilst 52% of transactions occurred during non-banking hours. Mobile recharges also found 34% more takers, increasing by value at 39%, which PayNearby attributed to higher consumption of data and talk-time as more individuals stayed indoors.

Demand for micro ATMs or mobile POS systems across the nation also saw an increase of 67% specifically in the unlock phase, with PayNearby adding, "[this] underlines the critical role played by these small retail outlets in bridging the infrastructure gap while also driving financial inclusion at the last mile."

Anand Kumar Bajaj, MD & CEO, PayNearby, on the findings said, "It is heartening to see an accelerated demand within the retail community to enable assisted financial transactions at local stores during these challenging times. We witnessed a sharp growth in retailers who wanted to join the program, and added more than 3 lakh registered retailers during this time."

"The rise in Micro ATM, mPoS and other digital payment transactions are indicative of the huge latent demand that exists for easy to use digital payment technology across the country, especially in Tier 2 and beyond regions," added Bajaj.