Demonetization has boosted the digital platforms for payment, which has helped National Payments Corporation’s RuPay card usage at merchant terminals soar seven times since November 8, taking the daily volumes to over 2.1 million. The RBI-administered retail umbrella body for all retail payment is targeting a daily volume of 5 million transactions through RuPay cards by next December. Also Read - FIR filed against Twitter India again, now over child pornography contentAlso Read - Mi Notebook Pro X to be Xiaomi's most expensive laptop yet, launch tomorrow
“Usage of RuPay cards at point of sale (PoSes) and for e-commerce together that used to be about 3 lakh per day (before the demonetization), is now about 2.1 million, which is a seven-times jump,” NPCI managing director and chief executive AP Hota told in an interaction. So far, the Corporation has issued 317 million RuPay cards, which include 205 million of cards to the Jandhan account-holders.
On November 8, the government demonetized high value worth over Rs 20.51 trillion notes, or 86 percent of the currency in circulation. This was followed with curbs on cash withdrawals both from the branch counters and ATMs. This led to a cash crunch as the Reserve Bank could not print enough notes for distribution and replenish the money equivalent to the scrapped amount.
With less cash in hand, people were forced to adopt digital transactions leading to an increase in usage of cards and other alternative modes for making payments. “Had there been no demonetization, it would have required enormous efforts from our end to increase the volume from 3 lakh a day to 2.1 million a day,” Hota said, adding however, that he is not happy with this volume and wants it to grow to 5 million a day.
“We should have a minimum 5 million transactions per day. I would say a less-cash society has arrived when we start seeing at least 5 million RuPay card transactions a day,” he said. But Hota, who is on deputation from the RBI, was quick to admit that it will take at least another year or so to reach to that level. ALSO READ: Finance Ministry waives off transaction fee on RuPay debit cards, railway e-ticketing till December 31
Meanwhile, he said since the note-ban, the USSD (unstructured supplementary service data) based mobile banking service from the Corporation also saw its per day transaction increasing to 0.6 million from about 0.15 million a day. As of the end of this month, transaction volume through the technologically more advanced Unified Payment Interface (UPI) jumped to 70,000 a day from about 35,000 per day, Hota said. So far 33 banks have joined the UPI platform launched by the NPCI this April.