Cash Use Rises, but 35 Million People Stay on Digital Platforms: NPCI

HIGHLIGHTS

  • Demonetisation helped get 5 crore new customers on digital mediums
  • Over 30 million continue to use digital ways for payments
  • There has been a month-on-month decline in digital transactions

Even as data shows increase in cash usage again, the National Payments Corporation of India (NPCI) on Wednesday said demonetisation helped get 5 crore new customers on digital mediums and over 3 crore have stayed on.

“If you look at on standalone basis, the country would have added 30-35 million customers on the digital platforms, who have stayed on digital platforms,” NPCI Chief Operating Officer Dilip Asbe told reporters in Mumbai.

He said the cash crunch after demonetisation pushed 10 crore people to use digital or cashless transactions. Even though many of them went back to using cash after that, over 30 million continue to use digital ways for payments.

Asbe said in normal course it would have taken at least two years for getting the 30-35 million more people to use digital transactions.

There was a huge spike in digital transactions after the Government banned 86 percent of the currency by value on November 8 last year. However, as the remonetisation progressed, there has been a month-on-month decline in digital transactions for two consecutive months till February.

Official data shows there was a 9.1 percent fall in digital transactions in January 2017 over December 2016, while February witnessed a decline of 21.3 percent over the preceding month.

Asbe said digital payments is a “habit” and more efforts will be required on customer education, literacy and awareness to push cashless transactions.

Simultaneously, work is going on to increase the number of touchpoints where the digital alternatives can work, he said, adding in the next two years these will jump 10 times to over 15 million.

The NPCI has filed for patent for the Unified Payments Interface (UPI) and expects to get it in the next year, Asbe said.

Meanwhile, he said the soon-to-be launched Aadhaar Pay will have a merchant discount rate (MDR) similar to the present 0.25 percent on transactions under Rs 2,000.

Asbe said attempts are on to merge the Bharat QR code with the UPI QR code.

Asbe was speaking after launching the BHIM-enablement service launched by Mastek-backed financial services start-up Benow in association with mid-size private lender Yes Bank.


[Copyright By Press Trust of India]