MUMBAI: Electronic transactions are growing rapidly after demonetisation, but the growth was already healthy even before the note ban, says Nomura in its report titled India- A less-cash economy.
After demonitisation, one of the intended goals was to push individuals towards a less-cash or more digital economy. Banks, mobile wallet companies and payments providers are pushing individuals to use credit/debit cards, mobile wallets.
The Reserve Bank of India (RBI) payment data show that volume growth of retail electronic payments rose to 37.7 per cent y-o-y in December 2016 from 22.7 per cent in October 2016, while value growth of electronic payments rose to 23 per cent from 16.9 per cent.
“Data from the two-year period prior to demonetisation show that growth of retail electronic payments was already robust, with growth averaging 25.7 per cent y-o-y in volume terms and 14.6 per cent in value terms,” the report said.
“Thus, while growth did indeed increase after demonetisation, a gradual acceptance of electronic payment methods was already underway.”
As the economy is remonetised and cash again becomes easily available, some of this recent momentum will likely to fade. The report said that more measures to incentivise digital payments or disincentive cash may be necessary.