The digital payments and fintech saw record highs in 2020. The massive increase was because a large number of people preferred to stay at home and to carry on social distancing.
Many people not only in metros but also in smaller towns with concerns over contracting novel coronavirus infection from visiting bank branches and using currency notes had started using their smartphones taking loans for smooth banking service and for making the payments. The Unified Payments Interface to the Aadhar-enabled Payment System (AePS) witnessing leading growth and the digital payments touched a record high in 2020.
UPI transactions touched a record high at 221 crore transactions in November after crossing the 200-crore mark in October. The 221 crore transactions worth ₹3.9-lakh crore. The Centre has set a target of ₹4,630 crores for digital payments for the financial year 2020-21. All the players in the sector are hopeful that the number is likely to be exceeded. Though in a graded manner, the entry of popular messaging service WhatsApp into the payments sector and the RBI’s decision to hike the limit for contactless card transactions is expected to further fuel growth.
The founder and CEO, Mswipe expressed that the demonetisation in 2016 had sparked the initial take-off of digital payments in India. The momentum continued by the efforts of the government over the period of time. From metros to tier 4 and 5 cities the digital payments and digital commerce had got a large scale adoption due to the global pandemic. The contactless payments had increased from 13 per cent of total transactions in January 2020 to 30 per cent of total transactions December 2020 at Mswipe.
Most banks have witnessed a sharp increase in usage of their digital banking channels and mobile due to the pandemic as it is forced traditional banks to rely more heavily on their digital channels to get to the customers. New and innovative moves have been initiated by banks such as WhatsApp banking and video KYC have been widely adopted by customers.