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PayU has released the PayU Insights Report, providing a comparative analysis of digital payments in lockdown periods in 2020 and 2021, as seen through changes in digital payments transactions across the platform. The report provides insights into the impact across sectors as well as an overview of the Indian digital payments space. Year on year, there has been a 52% increase in the number of transactions and a 76% increase in expenditure (May 2020 vs. May 2021). Compared to pre lockdown months, there was a 10% increase in the number of transactions post lockdown 2021, and a 21% decrease in average ticket size indicating that users are adopting digital payments even for smaller size transactions. PayU is a pioneer in driving value addition for merchants and banks through data insights, offering targeted solutions which allow them to deepen customer engagement & create actionable business strategies.
Insights
Online Donations to Charitable Causes Rise
Digital payments for charitable causes witnessed a massive 731% increase in the number of transactions, a 2308% increase in expenditure, and a 128% increase in average ticket size vis a vis pre-lockdown months in 2021. Compared to lockdown 1.0, the number of transactions and expenditure increased by 575% and 476% in lockdown 2.0. As the second wave of the COVID-19 pandemic unfolded, numerous donation campaigns were organized by NGOs and crowdsourcing platforms to raise funds for COVID relief.
Logistics Gains Momentum
In lockdown 2.0, the logistics sector recorded a 217% increase in the number of transactions and a 227% increase in expenditure, compared to lockdown 1.0. Interestingly, the logistics sector also maintained a steady 59% growth in the number of transactions and a 57% increase in expenditure compared to the months before lockdown 2.0. This could be attributed to larger usage of courier delivery services and purchase and transfer of essential items during the May 2021 period. It is also possible that incentives announced in Budget 2021, such as the scheme to boost digital payments may have improved sentiments for the sector.
Entertainment sees a Downturn
The entertainment sector suffered from the impact of the second wave of the pandemic, as there was a 35% decline in the number of transactions, a 41% decrease in expenditure, and an 11% decline in average ticket size in lockdown 2.0 vis a vis pre-lockdown 2.0.
The UPI Juggernaut Continues
Lockdown 2.0 recorded phenomenal growth for UPI as a payment mode. The number of transactions through UPI increased by 320% and expenditure increased by 306% in lockdown 2.0, compared to lockdown 1.0. The next highest growth in modes of digital payments was observed in credit card transactions, as the number of transactions increased by 87% and expenditure increased by 69% year on year. For net banking and debit card modes, the number of transactions grew by 12% and 6% respectively year on year.
Impact on Travel
The number of transactions grew by 186%, and expenditure by 125% between lockdown 1.0 and 2.0. This is understandable, as travel rose once the economy opened and restrictions eased during a staggered lockdown. However, immediately after the lockdown in 2021, there was a 65% drop in transactions and a 78% drop in expenditure.
Commenting on the PayU Insights Report, Hemang Dattani, Head, Data Intelligence, PayU said “Broadly, businesses and consumers were better prepared to deal with the exigencies of lockdown in 2021. Given that the lockdown was staggered and geographically restricted, the growth of digital payments has been steady, especially for sectors like retail, logistics & pharma. As a leader in the online payments space, PayU is well placed to capture macro-economic movements and offers industry specific insight-based solutions, enabling merchants to glean actionable intelligence and enhance their business strategies.”