When compared to lockdown 1.0, which saw a 31% decrease in transactions, expenditure has grown 37% in lock down 2.0. The number of transactions grew by 68% compared to pre-lockdown 2.0, and expenditure by 11%
Today, PayU, the leading online payments solution provider in India, released the PayU Insights Report, which compares digital payments transaction changes across the platform due to short-term or long-term lockdowns.
The report discusses how various sectors, as well as the overall digital payments industry, are affected. Both the number of transactions and expenditure have increased by 52% each year (May 2020 vs. May 2021).
Pre-lockdown months saw a 10% increase in transaction volume, with a 21% decrease in average ticket size, which indicates that online payments are increasingly becoming adopted for even smaller transaction sizes. PayU is a pioneer in the use of data insights to drive value-added services for merchants and banks. This allows them to cultivate greater customer engagement and discover actionable business strategies.
It’s at an all-time high for online donations to charitable causes in the wake of Lockdown 2.0. Overall, charitable contributions seen in the digital payments market saw a massive 731% increase in transactions, a 2308% increase in money spent, and a 128% increase in ticket price during the pre-lockdown months of 2021. 575% and 476% compared to Lockdown 1.0. As the second wave of the COVID-19 pandemic unfolded, various NGOs and crowdsourcing platforms came together to set up donation campaigns to support COVID efforts.
Lockdowns create momentum in logistics, with partial and staggered phases
In the logistics sector, the number of transactions increased by 217% and expenditure increased by 227% between lockdown 1.0 and lockdown 2.0. The logistics sector saw consistent growth of 59% in transactions and 57% in expenditure, compared to prior months. Higher usage of courier delivery services and greater use of electronic payment methods, especially during the May 2021 time period, may have played a role in this increase. It is also possible that Budget 2021’s incentive policies, such as the one that expands digital payments, had a positive impact on the sector’s opinion.
The entertainment and gaming industries are suffering
During the second wave of the pandemic, the entertainment sector witnessed a 35% decline in transactions, a 41% decrease in expenditure, and an 11% decrease in average ticket size.
The gaming sector showed healthy growth in 2020, but declining growth in 2021. Pre-lockdown months saw the number of transactions and expenditure drop by 63%. There was an increase in the number of transactions in lockdown 1.0. Non-essential spending, cancellation of IPL 2021, and general muting of sentiments during this phase are all reasons why this trend could be occurring.
The UPI machine keeps on rolling
Lockdown 2.0 helped the UPI payment method achieve incredible growth. In lockdown 2.0, the number of transactions increased by 320%, while expenditure increased by 306%. There was an 87% increase in credit card transactions and a 69% increase in spending on an annual basis. The total number of transactions increased by 12% and 6% year over year for debit card and net banking transactions.
Impact on international travel
There was a significant increase in the number of transactions from Lockdown 1.0 to 2.0 (186%). There was a much greater growth in spending (125%) over that time period. This makes sense, as travel is generally up when the economy is growing and restrictions on travel are easing in steps. However, there was a 65% reduction in transactions and a 78% reduction in expenditure after the lockdown in 2021.
Dattani, head of data intelligence for PayU, noted in the PayU Insights Report, ” “When looking at the general populace, businesses and consumers were better equipped to handle the stresses of a lockdown in 2021. The steady growth of digital payments is especially for sectors like retail, logistics, and pharma, as the lockdown was staggered and geographically restricted. PayU’s prominence in the online payments industry gives it an edge in capturing macroeconomic trends and in providing custom-tailored insight-based solutions that help merchants pinpoint ways to improve their operations.”
There was a 78% increase in the number of transactions, and a 31% increase in expenditure, in the six months prior to lockdown in 2021, compared to non-lockdown months. There was a 9% decrease in transaction numbers and a 22% decrease in expenditures every year on year.
Retail sales increased by 260% year-over-year and expenditures increased by 235% year-over-year. Transactions went up by 36% while expenditure went up by 25% during Lockdown 2.0 in comparison to the pre-Lockdown months in 2021.
There was a 171% year-on-year increase in the number of transactions, along with a 108% increase in spending. The number of transactions post-2.0 increased by 52% compared to pre-2.0 months in 2021.
Source: ANI via PRNewswire
(Only the headline, some content and picture of this report may have been reworked by the Mixpoint Team; the rest of the content is auto-generated from a syndicated feed.)