Average daily transactions via Aadhaar-enabled Payment System (AePS) surged to 11.3 million in April, making them an outlier. Unlike peers Unified Payments Interface (UPI) and Immediate Payment Service (IMPS), AePS emerged a winner amid the lockdown, piggybacking on government transfers to the disadvantaged. Cash is convenient and reduced mobility has done little to change that even if it is a temporary phenomenon.
As Yes Bank MD & CEO Prashant Kumar pointed out, much of the spending relates to basic everyday requirements at shops that deal in cash. “The spending is only for taking care of the kitchen and is taking place at neighbourhood shops which have always been accepting cash. So, basically cash becomes more convenient at this point of time,” Kumar said. He believes that as e-retailers open up for more business, the purely digital modes of payments will catch up.
Also, as Anand Kumar Bajaj, founder and CEO, PayNearby, explained, beneficiaries of schemes such as the JanDhanYojana habitually use cash, “The segment of the population that the government is making transfers to anyway deals in cash. So right now, cash is in because there is no other option,” Bajaj said.
As people turn wary of using ATMs in the middle of a pandemic outbreak, banks and non-bank players in the payments system have had to find ways to reach cash to their doorsteps. In some cases, they have had to remove charges on cash transactions in order to ease the flow of money.
- Source – Financial Express
- Published Date – May 11, 2020