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Despite drop in transaction volumes, fintech platforms in India see surge in new users

Annapurani. V | Updated on April 23, 2020 Published on April 23, 2020

They go the extra mile to simplify on-boarding processes

The lockdown imposed on account of Covid-19 has hit economic activity significantly. It has brought down transactions — both in volume and in value terms — on digital payment platforms in India. But all is not lost. Certain types of transactions are seeing a spike.

“After the lockdown, volumes started coming down,” said Harshil Mathur, CEO and co-founder of Razorpay, a payment gateway platform. This was because, initially, a lot of businesses got shut down and purchases were restricted to essential items and even with those, the orders dipped significantly due to disruptions in supply chain and logistics, he added.

According to data from the National Payments Corporation of India (NPCI), the volume of Unified Payments Interface (UPI) transactions fell to 1,246.84 million in March, the lowest in the past four months. The amount transacted also fell to ₹2,06,462.31 crore, a 7 per cent decline from February.

New users on board

But the lack of travel, and work from home routines, have resulted in more people engaging in online gaming, video on demand and ed-tech platforms. These sectors have now turned morale boosters for the fintech start-ups in the country and have been helping to up their transaction volumes. That apart, the public is also increasingly refraining from making cash and card payments — due to fears of virus infection – and resorting to paying bills and getting recharges done online.

“Money transfers, recharges, DTH and bill payments — we are at an all-time high in all of these — the volume of these transactions is up by 30-40 per cent on our platform,” said Karthik Raghupathy, VP Strategy & Business Development, PhonePe, a payments app.

Furthermore, retailers who sell essential goods such groceries and medicines offline are now signing up on these fintech start-ups to sell their goods online. All of these have led to an uptick in the number of new users transacting on these platforms.

“There is a significant shift in the momentum; businesses are preferring to go online,” said Akash Gehani, COO and co-founder of Instamojo, another payment gateway firm. “We are seeing more than 25-30 per cent growth in the number of new users that are signing up on the platform every day,” Gehani added.

Phone Pe’s Raghupathy said the number of new users added on their platform every day has gone up by 50 per cent since the lockdown.

“On an average, we have been seeing a 10 per cent growth in the number of new users on our platform, on a daily basis, during the lockdown period,” said Razorpay’s Mathur.

Ease of transactions

To make the on-boarding processes easier for users who sign up now and to help the essential service providers conduct online transactions seamlessly, these fintech platforms are going the extra mile to simplify the procedures involved.

Pine Labs, a merchant platform company, for instance, has rolled out an Android mobile payment application ‘ePoS by Pine Labs’, that helps merchants accept payments via cards, UPI, and wallets. Instamojo is offering priority KYC for businesses in the essential services, which will help them conduct online transactions on its platform within 3-5 minutes of signing up. Razorpay has introduced same-day settlements for all businesses selling essential goods such as groceries and medicines.

“We are sending the money to them within a couple of hours as opposed to the typical 3-4 days, so that their businesses are not affected as much by the current economic situation,” said Razorpay’s Mathur.

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Published on April 23, 2020
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