Amid the recent cash crunch in the country, the digital payment companies have started to witness an upswing in transactions across their platforms. India has a couple of notable digital payment companies like Paytm, Mobikwik and Flipkart-owned PhonePe.
As far as PayTm is concerned, its transactions have witnessed an upswing of 30 percent in its transactions across the areas facing a cash crunch. “In the wake of the ongoing cash crunch, customers are using more of our services, which has led to phenomenal growth in money transfers and QR-based payments in the cities where the ATMs have gone dry,” Paytm COO Kiran Vasireddy said.
A noteworthy point is that One97 Communications, which owns the Paytm brand, said it has seen a 30 percent surge in transactions from several cities across India compared to the last month. The cities which are majorly facing the cash crunch are the mentioned but not limited to Andhra Pradesh, Bihar, Gujarat, Assam, Karnataka, Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh and Telangana.
Due to the festival season, the banks witnessed a massive increase in demand for cash in households. However, ATM’s and banks ran out of cash due to the misallocation of funds, according to the finance ministry. There is enough cash in the system but more has been allocated to different cities.
Co-founder and director of MobiKwik, Upasana Taku said that the spurt in demand of cash and availability of the same in banks and ATMs has led to an increase in digital transactions. “Over the last few days, we have seen a surge of 27 per cent in our digital payments as well as QR-based payments to merchants, primarily driven by the consumers in regions where the cash crunch is acute. We are also seeing a 33 per cent increase in KYC/e-KYC requests,” she said.
In order to meet the demand, India is expected to have an additional Rs 80,000-1 lakh crore for satiating the requisites of a growing economy and its people. The cash crunch has been observed in some parts of the country and is being aggressively death with by the RBI and the government. The printing of currency has been expedited. The RBI is also closeyl working to mitigate logistic delays.