In a major drawback to the digital India move and cashless economy, the digital transactions that gained popularity following the demonetization move, have started declining with the lift in remonetisation – indicating the return of people’s preference for hard cash.
According to the latest data from the Reserve Bank of India (RBI), around 9,575 lakh transactions were done through a range of digital modes such as credit cards, debit cards, UPI (Unified Payment Interface), USSD (an innovative payment mode which does not need Internet or smartphone), and mobile banking in December 2016. The transaction valued Rs 104.05 lakh crore.
But then, the number of transactions cut down to 8,704 lakh in January and then to 7,630 lakh in February. While the transactions through debit and credit cards on PoS at merchant establishments reduced in January and February, the transaction through the USSD augmented in January over December, before eventually declining in February.
Conversely, transactions through the UPI seem to be growing. In December, UPI transactions were at 20 lakh that augmented to 42 lakh in January and eventually rose to 42 lakh in February.
Following the demonetization move, the government is constantly focusing on escalating the digital payments and even incentivizing people to shift from cash transactions to cashless or digital mode.
