Online payments dropped by 30 % amid lockdown, says Razorpay
Online payments dropped by 30 per cent through the nationwide lockdown, hit by a fall in digital transactions across sectors like logistics, travel, property and food and beverages, according to a written report by fintech platform Razorpay.
The report is founded on transactions on Razorpay's platform between February 24 to March 23 (before lockdown) and March 24 to April 23 (during lockdown).
It found that digital transactions recorded the best fall of 41 % in Gujarat accompanied by Madhya Pradesh (39 %) and Tamil Nadu (26 %).
Interestingly, segments like utilities (bill payments), IT and software, and media and entertainment saw a rise of 73 %, 32 % and 25 %, respectively as persons stayed indoors.
"Transactions in logistics dropped by 96 per cent due to gaps in supply chain. Travel sector declined by 87 per cent, property by 83 %, F&B by 68 per cent, and Grocery by 54 per cent," the report said.
Digital transactions in cities like Ahmedabad, Mumbai and Chennai took popular of 43 %, 32 % and 25 %, in these 30 days (March 24 to April 23), it added.
"A substantial drop of 30 % in online payments in the last thirty days is something we are seeing for the very first time after demonetisation," Razorpay CEO and co-founder Harshil Mathur said.
He added that in the first fourteen days of March before lockdown, the entire online spending increased by about 10 % but later saw a dip generally owing to protective measures which people began to take by staying indoors.
Mathur said while COVID-19 continues to create uncertainty on several fronts, the pandemic is also a turning point for the fintech industry.
There has been a rise in adoption of digital payments, especially in tier II and III cities in the last 30 days of lockdown.
"I believe this is a huge opportunity for fintech companies, many of them may have to re-examine their business models after COVID-19, prioritising growth and customer acquisition over profitability. The fintech industry will be required to evolve, think big and act boldly that may eventually bring about innovations in payments and banking solutions to manage to meet new customer demands and behaviours," he said.
During lockdown, online donations (transactions) towards NGOs increased by 180 per cent, the report said.
Among payment modes (during lockdown), UPI made the best contribution of 43 %, followed by debit and bank cards with 39 % and netbanking with 10 per cent.
However, when compared to 30 days before lockdown, transactions via UPI, cards and netbanking declined by 37 per cent, 30 % and 28 %, respectively, the report added.
Among UPI apps, Google Pay contributed the highest with a 46 per cent share followed by PhonePe with 29 per cent and Paytm with 10 %. During the lockdown, Paytm saw a drop by 47 %, Google Pay 43 % and PhonePe 32 %.
Mobile wallet transactions, particularly in tier II cities saw a spike within the last 30 days, due to increased contribution to PM Cares Fund and cashback offers and transactions via JioMoney increased by 66 per cent, AmazonPay by 63 per cent and Paytm by 43 per cent, the report said.
