Status Of Digital Payments In India – Free PDF Download

• Covid-19 is nothing short of a watershed moment for the fintech industry in India.
• The fear of contracting the virus has forced people to take to contactless payment methods, which has led to digital transactions soaring.

What are fintech companies?

• Financial technology (FinTech) describes the evolving intersection of financial services and technology.
• So Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services.

• Payment apps have been seeing an increase in the number of new users and merchants on their platforms.
• Unified Payments Interface (UPI), Immediate Payment Service (IMPS), Bharat Interface for Money (BHIM) transactions have also been shooting through the roof over the past three months.

How much is the growth in digital transactions?

• According to data from the National Payments Corporation of India (NPCI),
• The amount transacted through UPI was ₹2,90,537.86 crore in July 2020, the highest ever,
• The volume of transactions was 73 crore the most since the interface was introduced.

• The amount transacted via BHIM was ₹6,395.75 crore, the most since February this year.
• IMPS registered its record highest transaction amount of₹2,25,775.24 crore, in July.

• For the first time, in the fourth quarter of 2019,
• The value of card and mobile payments at Rs 10.57 lakh crore exceeded
• ATM withdrawals which amounted to Rs 9.12 lakh crore.

What it indicates?

• These figures indicate that Indian consumers are slowly starting to become more comfortable using digital payments.
• Investments into the fintech sector soared last year.
• With this increased acceptance and preference for contactless payment methods over the past three months,
• One would assume that fintech funding would also touch new heights.

Dip in funding

• Contrary to expectations, the funding that went into the fintech start-up space in Q2 2020 was the lowest in the past nine quarters —
• Only $184 million was invested in the April-June quarter this year

Reason for decline

• The NBFC sector is witnessing several liquidity constraints, overall credit disbursements,
• Some of which that are facilitated by fintech companies have also been impacted.
• Payment fintech is a crowded segment; the industry operates on thin margins and is always under pressure.
• Like most sectors, VCs chose to wait and see how companies including (in the) fintech (space) weather the COVID storm.

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