Covid-19 Claims Digital Payments In India As Latest Victim: 30% Slump In Transaction Volume

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Gues, who is the latest victim of Coronavirus – Digital Payments in India!

The increased countrywide panic in India due to the coronavirus outbreak has caused shops to shut down, travel bookings to getting cancelled and consumers to slowing down their spends when it comes to activities such as dining out or going for movies. These measures besides acting as precautions have also been otherwise hurting the fast-growing digital payments sector of our country.

It has been reported that a decline of a whopping 30% in digital payment transaction value has been observed by various industry executives of the sector over the past few weeks.


Leading firms which process digital transactions both offline and online have indirectly been suffering due to the restrictions that are being exercised to contain the Covid-19 outbreak from spreading further. The air travel, hospitality and retail sectors have been impacted the worst.

A payments’ firm executive has mentioned that the impact has been observed mostly in the metros only and not India-wide as of right now.

Leading payments’ companies have confessed to media outlets that the value of transactions has taken a significant hit even though the consumer traffic still seems to be high on digital channels.

Kush Mehra, the Chief Business Officer of Pine Labs which Point-of-Sale (PoS) terminals player, expressed his concerns regarding this issue by saying that the daily routine of the consumers has undoubtedly been affected due to the outbreak as only a limited few physical footprints are being observed in stores. However, he believes it is too early to assess the entire damage the current situation has done to offline transactions across all merchant categories.

Coming to the travel industry, transactions processed under this segment which accounts for over 25% of the entire online spend volume. Online payment solutions provider Razorpay and payment gateway platform CCAvenue have reported that it too has taken a big hit and has been reduced down to 35% to 40%.


A 10-15% reduced rate of transactions have been recorded by BharatPe QR-based platform as well.

“To the extent that markets are getting shut, stores are not opening, and our merchants are not able to do businesses especially in metros like Mumbai. We have seen a nearly 10% contraction in digital transactions processed over the last few weeks,” Ashneer Grover, CEO of BharatPe, told ET

Harshil Mathur, CEO, Razorpay expressed his concerns regarding the slump that he observed in the digital payments related to aviation by saying that this particular sector contributes almost one-fourth of all the online digital transactions but due to the current conditions. He mentioned that it has seen a 40% fall due to reasons which are mostly related to the restrictions on international travel and has therefore led to cancellations and refunds.

He also pointed out that though the aviation sector is seeing a significant downward spiralling of digital payments, spendings related to the essentials segment such as utility, groceries and food delivery services have increased quite a bit.

“March and April see customer demand for travel. This (virus) posts a cloud on future transactions through the sector which brings nearly 30% of the payments for the online payments industry,” said Vishwas Patel, CEO, CCAvenues.

He further added that the consumer demand for new airline tickets has slumped 35%.

Digital payment industry in India is expected to clock a phenomenal growth rate in the next few years. The contribution of India to the worldwide digital payment’s transactions value is estimated to increase to 2.02% from 1.56% in the next four years. According to Assocham-PWC India study, the total transaction value would be doubled, increasing to $135.2 billion in 2023 from $64.8 billion in 2019.

Changing Consumer Spends Amid The Outbreak

As mentioned earlier by Harshil Mathur, the CEO of Razorpay, it has been observed that several consumers are now choosing to heavily spend in the ‘essentials’ category, thus confirming the fact that other than thrusting the entire country into panic mode, the COVID-19 has also significantly changed our spending habits due to the precautionary measures that are being advised to be taken.

Therefore, it is very much possible for the increasingly changed spending habits of consumers to pick up the slump that the digital payments industry is facing in regular and expected areas. However, by how much it will be able to do so is a question that only time will be able to answer. We will keep you posted.


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