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Impact of COVID-19 on Payment Transactions
Journal
Statistics and Applications
Date Issued
2020-07-01
Author(s)
Das, Ashish
Das, Suchismita
Jaiswal, Aashima
Sonthalia, Tushar
Abstract
Due to the extreme contagious nature of the COVID-19 virus, the Government of India has had to implement several restrictions to curb the outbreak. The brunt of the economic consequences of the restrictions has been faced majorly by the aviation, tourism and hospitality sector. Nevertheless, many other small/medium/large services are facing the economic consequences. With the lockdown allowing mostly the essential sectors to continue to function, the spending of disposable income is expected to reduce drastically. The cash withdrawals at ATMs is a prominent measure of the general retail economic activity. We show its impact along with the impact on other digital payment modes such as Debit/Credit cards, UPI, IMPS, NEFT and RTGS. We present the extent to which COVID-19 and the subsequent nationwide lockdown and slow unlocking, during April-May-June 2020, has impacted the financial transactions in the country. The sheer slowdown of the economy gets depicted by the drastic reduction of retail payment activities in the country. Based on transaction data during Q4 of FY20 and Q1 of FY21, we relate the economic impact of COVID induced lockdown and its subsequent relaxations. Although the economy is likely to suffer in FY21, we have begun to see some form of cautious and calibrated opening up of economic activity, as we see payment transactions picking up starting June 2020. The positive effect of COVID can be seen in form of increased levels of BHIM-UPI usage, as more and more people learn to use this mobile app-based, easy to use, digital mode of payment.
Volume
18
Subjects