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The outbreak of novel coronavirus infection has brought a significant change in the digital payment pattern among Indians, according to insights shared by payment solution firm Razorpay. Based on transactions on the company’s platform between February 2020 and now, Razorpay has said while there is an uptick in the overall digital spending, online travel bookings have taken a hit due to different travel bans across regions.
The travel advisories have led to a drastic drop in online travel spending in India. The sector, which according to Statista, contributed the highest to online payments in India with a 40 per cent share in 2019, saw a decline of 30 per cent between February 2020 and now.
However, overall digital spending saw an increase of about 10 per cent on the Razorpay platform from February to March, owing to this virus outbreak.
For the first time ever, online grocery shopping climbed the ladder with a growth of 9 per cent, and government and utility bill payments grew by 30 per cent, representing precautionary steps taken by the customers by staying indoors.
On the current situation, Razorpay CEO and co-founder Harshil Mathur said, “From a macroeconomic perspective, we are seeing an increase in the demand for digital payments across a few sectors – Grocery, e-commerce and utility bills have gone up, given the social isolation. On the flip, people are having to stay indoors and not having enough spending power, this can make the overall consumer spending go down creating a lasting (negative) impact. Nevertheless, we are all prioritising the right things now to ensure that the health of all of us is being taken good care of.”
Explained: Putting a cost to coronavirus
Since December 2019 when COVID-19 originated in China’s Wuhan city and its severity started to spread across the world, the global financial markets have been on the verge of a massive change. According to the UN Conference on Trade and Development, this outbreak might cost the global economy $1-2 trillion in 2020.
Other insights are as follows:
• Customers showed a 10 per cent increase in digital spending between mid February and now
• UPI (19.6 per cent), NetBanking (11.5 per cent), and Wallets (10.3 per cent) became the top 3 modes of payments during this plague
• As mentioned earlier, the fear of this outbreak brought down the contribution of the travel sector by 30 per cent and hospitality sector by 12 per cent (typically, travel and hospitality account for approximately 10 per cent of transactions on Razorpay)
• Fear of running out of home essentials made grocery make its way into the top 3 sectors with a growth of 9 per cent. Mutual Funds saw the highest growth of 33 per cent in this period, and the Government sector followed by a 30 per cent growth
• Number of online transactions has increased in Ahmedabad (by 11 per cent), Hyderabad (by 7 per cent) and Pune (by 5 per cent)
• Cities which otherwise saw only an upward growth dropped this time – Bangalore (by 3.2 per cent) and Delhi (by 2.6 per cent)
