Consumers have now opted for better technology platforms like joint payment interface (UPI) which does not require the intervention of the POS machine.
2021 saw a huge jump in digital transactions with consumers opting for easier payment options during the Diwali shopping week.
Even as record purchases of Rs 1.25 lakh crore took place during Diwali, the latest currency in circulation (CIC) data showed that it remained stagnant compared to the previous year.
steady increase in currency
SBI economists estimated that the Covid pandemic may have prompted people to keep Rs 3.3 lakh crore in cash for precautionary purposes in FY2011.
“If we adjust for such currency transactions, the currency to GDP ratio for net payment purposes may actually be lower in FY 2011 than in prior years,” it noted.
However, an almost steady increase in currency was reinforced with a significant increase in digital payment,
jump into digital payments
The report showed that 3.5 billion transactions worth Rs 6.3 trillion were registered through UPI in the month of October. This is a jump of 100 percent as compared to the same period last year.
The transaction value also increased by about 103 percent during the same period.
Further, the data showed that UPI transactions jumped 69 times since 2017 – from Rs 1,700 crore so far in 2021 to Rs 1,17,100 crore.
Similarly, credit card spending increased manifold between 2012, when it was only Rs 1,500 crore. After this it reached a peak of Rs 13,500 crore in 2020.
The report said that the credit card spend is set to set a record this year as already the YTD (Year-to-date) it has touched Rs 13,300 crore.
However, debit card transactions have stabilized indicating a shift to preference and UPI mode.
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