Thanks to the kharif agricultural crops arrival and festival seasons, digital payments in the country could hit a record two billion transactions this month, going by the trends in the first 15 days.
Digital transactions through the United Payments Interface (UPI) have crossed one billion between 1 and 15 October, according to data from the Reserve Bank of India.
With festivity picking up during the Pooja period and arrivals of the kharif crops continuing, the volume could easily double. If digital transactions hit two billion, its growth could be double than the transactions witnessed in October last year.
It will be the first time that such transactions are being witnessed ever since the digital platform was launched in 2016.
According to RBI data, a sum of Rs 1.92 lakh crore had been transacted during the period.
Digital transactions in the country have been hitting new highs since July this year after a drop in April following the onset of the coronavirus pandemic.
There are several reasons why digital transactions could hit two billion this month.
One is the festival sales offers at huge discounts by companies such as Amazon and Flipkart. Sales to the tune of over Rs 25,000 crore have reportedly taken place in view of these offers.
Most of the users will use digital platforms to make their payments, thus increasing UPI’s utility.
Second, the arrival of kharif crops is putting more money in the hands of the rural people.
In view of the campaign to discredit its agricultural reforms by the Opposition parties, the Centre is trying to ensure that farmers get a fair price for the produce and ensure the reforms take off without much delay.
Also, it is procuring commodities such as rice, pulses, cotton and copra more than last year. As the MSP for these crops has been raised this year, farmers will get additional cash.
The net result is that the rural folks, especially farmers, will be encouraged to go in for purchases of various products ranging from automobiles to electronics besides going in for construction or refurbishing their homes.
In the automobiles sector, both two-wheeler and car manufacturers are reporting higher sales this month.
A survey by The Hindu BusinessLine has revealed that consumers this month could go in for more of products such as electronics, garments, consumer durables, automobiles and home accessories.
This is another pointer that the mega sales by the retail giants could end up with record sales.
Besides, in view of the Coronavirus pandemic, most people prefer digital payments instead of carrying out cash transactions.
Probably, digital transactions are set to become the new payment norm in the country and the RBI data points to the emerging trend.
M.R. Subramani is Executive Editor, Swarajya. He tweets @mrsubramani
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