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Amidst surging Covid-19 cases and localised lockdowns that are making many migrant workers return home, domestic remittances have begun to fall.
According to players in the sector, while remittances had neared pre-Covid levels with economic activities normalising, in the last one month, it has begun to fall again.
“The trends show a remarkable growth in Aadhaar enabled Payment Systems and micro ATMs. People are drawing more cash and also digital payments have increased mostly from Maharashtra and Gujarat. A lot of people are migrating back to rural areas,” said Yogendra Kashyap, Managing Director and CEO, RapiPay Fintech.
According to the company’s data for the period March 1 to 15 and April 1 to 15 this year, domestic money remittance has declined by 10 per cent.
However, there is an upside for digital payments in terms of UPI in this period. Withdrawals from AePS have grown by 30 per cent and from micro ATMs by 27 per cent, Kashyap said, adding that people want to have cash in hand during the curfews and lockdowns.
Abhinav Sinha, co-founder, Eko India too said that with localised lockdowns, there has been a definite movement back of target customers back home or an impact on their working hours.
“There are definite signs of larger urban centres getting affected. Mumbai is more affected, Delhi a little less affected,” he said.
There has been a five to seven per cent fall in remittances in the two cities, he said.
According to Sinha, domestic remittances had come back to about 90 per cent of the pre-Covid level before the second wave of Covid-19 started. About 10 per cent of the customers had chosen to stay back in rural areas and were either working or looking for livelihood close to home.
Players, however, said the fall in remittances is not as sharp as the national lockdown last year when domestic remittances had fallen by about 40 per cent.
According to RapiPay, the average ticket size of AePS transactions is ₹2,000 while at micro ATMs it is about ₹3,500. The average ticket size of domestic remittances is also ₹3,500.
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