Despite a growth rate of up to 23 per cent in online education services, and 163 per cent in bill payments and several other sectors, overall digital transactions in the country dropped by 12 per cent between March 24 and July 2, Razorpay said in a report.
“Small and medium businesses and consumers are beginning to realise the friction and frustration involved in handling cash after having experienced seamless digital payments. But for this to happen at scale, the government’s constant push to digitisation through necessary education, digital rewards and incentives may not be enough,” the co-founder and chief executive officer of Razorpay, Harshil Mathur, said.
With stress on household incomes rising, people also preferred to go more for the pay later schemes as well as for EMIs as payment by such methods rose by 290 per cent, and 125 per cent, respectively, the survey showed. The extended period of lockdown also led to a significant rise in online education spending, which rose by as much as 23 per cent between March 24 and July 2.
“The preference for learning on digital platforms is here to stay. The integration of technology into the classroom experience has the potential to bring unprecedented benefits. The online education market is expanding at a compound annual growth rate of 43.8 per cent from 2019 to reach $4.8 billion by 2024,” advisory firm EY had said in a report for India.
Though overall volumes of transactions are likely to remain higher this year on account of people’s preference to use more digital payments instead of cash, the lower than normal value of individual transactions may lead to overall decline of revenue in the e-payments sector, Razorpay said.
“Tier-2 and tier-3 cities could continue to demonstrate high adoption of digital payments in sectors beyond bill payments/utilities. Overall revenue in e-payments market is due to losses likely to decline this year, from e-commerce, travel, lending and hospitality sectors ,” the report said.
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