In the midst of the COVID-19 pandemic, a significant number of individuals are resorting to digital transactions to purchase necessary goods
In the midst of India's 21-day nationwide lockdown due to the COVID-19 outbreak, a significant shift towards digital payments for essential items has been observed. According to recent data, approximately 50% of all debit and credit card transactions during the last two weeks were for food and grocery purchases, a marked increase from the 12% prior to the lockdown announcement.
This trend is being actively encouraged by banks, sector regulators, and the National Payments Corporation of India (NPCI), who are promoting contactless cards and Unified Payments Interface (UPI) as safer alternatives during the pandemic. New payment trends have also emerged on offline spending platforms, with swipe machines and offline UPI modes through QR stickers gaining popularity.
The surge in digital payments for essential items like food, groceries, medical supplies, telecom recharges, and utility bills is a clear indication of the changing consumer behaviour during this unprecedented time. Major companies like Amazon, BigBasket, Swiggy, 1MG, Zomato, Grofers, and FirstCry have stopped accepting cash on delivery, while pharma delivery startups like 1MG have also stopped accepting cash. Even delivery services like Dunzo are requesting pre-payments for deliveries.
The increase in digital payments is not limited to online transactions. BigBasket's daily orders have spiked to 325,000, which is three times the normal amount. The average digital ticket sizes in the first week of the lockdown were as high as 20 percent, indicating a tendency among consumers to hoard supplies. However, since supply chain pressures have eased, there has been a slight moderation in the per ticket spends.
The usage of NPCI's Bharat Bill Payments Systems (BBPS) has increased by around 22 percent during the lockdown, reflecting the growing preference for digital payments. Digital payment companies have experienced a surge in transaction volumes, while sectors like aviation, hospitality, fuel, and e-commerce have seen overall volumes plunging. Mobile recharge volumes for payment gateways like CC Avenues, Billdesk, and PayU have surged upwards by 20-25 percent during the lockdown period.
There has been an aggressive push by banks and regulators to promote 'non-contract digital' payments, with the goal of encouraging a cashless society. As the lockdown continues, it is expected that the trend towards digital payments for essential items will persist, reflecting the changing landscape of consumer behaviour in India.
