While online wallet companies including Paytm, MobiKwik and Free-Charge are declaring massive growth in business post the withdrawal of Rs 500 and Rs 1,000 notes from circulation, provisional data shared by RBI paints a far less buoyant picture.
Digital payment companies have been rushing to capitalise on the short supply of physical money following the government’s announcement on November 8 and its push to encourage cashless transactions. They have been pumping in lakhs of rupees to expand and ensure their platforms are accessible widely, in taxis and auto-rickshaws and at the smallest of stores and street vendors.
But, the central bank’s numbers indicate that digital wallet transactions aren’t picking up as rapidly as these firms would have hoped for. The companies’ own numbers suggest otherwise.
According to RBI data, in the first four days of December, the volume of transactions done daily through eight leading mobile wallets and prepaid payment instruments (PPI) was about 25 lakh, worth about Rs 60 crore. According to Paytm, though, the country’s largest digital payments company is registering at least 32.5 lakh transactions every day on its digital wallet. Overall, including the non-wallet transactions through its platform, Paytm said it registers more than 50 lakh transactions worth about Rs 100 crore every day.
The company declined to comment on RBI’s data. FreeCharge said it has registered a nine-fold jump in merchant transactions on its platform, and MobiKwik reported an overall 18-time increase in its transaction volumes.
Oxigen Services, which also has a digital wallet, said transactions increased to Rs 600 crore in November from an average of Rs 450 crore a month earlier. However, 90% of the company’s transactions are peer-to-peer payments, Oxigen said, which would mean that the company may not have been considered for RBI’s provisional data since it only factored online payments for goods and services.
According to RBI, Rs 1,320 crore was paid through the eight mobile wallets across 5.9-crore transactions for goods and services in November. The regulator did not provide comparative figures for previous months.
Some payments industry executives, though, concede that growth for digital wallets has remained sluggish. “I have maintained that (credit and debit) card transactions are the ones showing real growth (post demonetisation), while for wallets it has generally been difficult,” said Amrish Rau, chief executive of PayU India.
The company’s payment gateway registered 12 lakh card transactions a day post demonetisation. “98% of the volumes are on cards and 2% on wallets,” Rau said, adding that Pay-U’s digital wallet has contributed only 1% to the company’s revenue. The fact that physical cash is gradually coming back into circulation, coupled with RBI’s new rule waiving two-factor authentication for transactions up to Rs 2,000 is likely to temper the growth plans of the digital wallet providers.
Source: The Economic Times