Buy Now Pay Later (BNPL) has grown by 637.27 per cent in 2021, as compared to the 569 per cent growth observed in 2020, according to Razorpay’s ERF report.

Growth in digital transactions

Further, digital transactions are becoming a popular choice in everyday households. Transactions relating to Telecom and Electricity bills saw a growth of 3640 per cent and 2353 per cent respectively, from 2020 to 2021. Lifestyle and Fashion were the highest contributors to the E-commerce transactions in 2020, however, it has been overtaken by Groceries in 2021 which saw a growth of 233 per cent. More and more people became health conscious in 2021 as fitness-related transactions saw a growth of 611 per cent. 

Tier-2 cities and Tier-3 cities recorded a significant average growth of almost 50 per cent in digital transaction volumes from 2020 to 2021, the report shows.

Food and Beverages and Financial Services sectors were top contributors to the total transactions, followed by Games, Utilities, and E-commerce. With more people opting for freelancing, Services saw the highest growth of 769.86 per cent in transaction volumes as compared to 2020. Housing and Real Estate was the second fastest-growing sector in 2021. It saw a growth of 315.65% and had four times the transactions it did in 2020.

Bank transfers decline

The subscription economy is booming with recurring payments seeing a significant growth of 225.31 per cent in 2021. Other payment methods also contributed significantly to total transactions in 2021, such as UPI (63.02 per cent) and Card (25.92 per cent). Interestingly, bank transfers took a whopping hit in transaction volumes declining by 51.77 per cent.

These insights were launched by Razorpay, the full-stack financial solutions company, in its 10th edition of ‘The (Covid) Era of Rising Fintech (ERF)’ Report. The report is based on online transactions held on the Razorpay platform from January to December, 2020 & 2021.