A fascinating side effect of the coronavirus-led lockdowns in multiple countries is their impact on payment methods – and notably payment methods in India, where a recent report says, digital payments are surging.
This trend, if maintained, could accelerate mobile data and 4G penetration and, the research report by brokerage and investment group CLSA suggests, this could benefit Bharti Airtel in particular, around 50 per cent of whose subscribers are still to upgrade to 4G. Reliance Jio's partnership with WhatsApp for its JioMart service could be another notable beneficiary.
Digital payments are already rising in number in India, and the lockdown has further boosted this trend. Mobile accounts for between half and three quarters of all digital transactions, but, as the report points out, with mobile penetration at 87 per cent, there’s no doubt an opportunity to encourage more end users to switch to digital payments or upgrade their accounts to enable them to do so.
The government is helping to accelerate this trend through UPI, an instant real-time payment system developed by National Payments Corporation of India (NCPI) that allows instant money transfer between two bank accounts on a mobile platform. This has enjoyed strong take-up, with estimated monthly transactions hitting 1.3 billion and now accounting for 41 per cent of total mobile banking transactions in value. The government is said to be aggressively promoting digital payments via UPI during the lockdown.
The result of all these trends could be greater subscriber engagement with mobile, a boost to 4G rollout and, according to CLSA, the potential development of a supporting service ecosystem. However, the proof of the lasting effect of these trends may not be clear until Indian society goes back to some sort of normality.