Razorpay, the leading full-stack financial solutions company, today shared insights about the impact of the Coronavirus (Covid-19) outbreak on digital payments in India. The insights are based on transactions held on the company’s platform between February 2020 and now.
Since December 2019 when Covid-19 originated in China’s Wuhan city and its severity started to spread across the world, the global financial markets have been on the verge of a massive change – according to the UN Conference on Trade and Development, this outbreak might cost the global economy $1-2 trillion in 2020.
The travel advisories have led to a drastic drop in online travel spending in India. In 2019, according to Statista, the Travel sector contributed the highest to online payments in India with a 40% share. According to Razorpay, the current situation has brought a decline of 30% in online travel bookings, signifying a downturn in the sector’s contribution to overall digital payments.
At the same time, as human interactions are reducing, consumer payment habits are changing – overall digital spending saw an increase of about 10% on the Razorpay platform from February to March, owing to this virus outbreak. For the first time ever, Online Grocery Shopping climbed the ladder with a growth of 9%, and Government and Utility Bill Payments grew by 30%, representing precautionary measures that the customers are taking by staying indoors.
Let’s take a look at how the pandemic has impacted other aspects of digital payments. Again, these insights are based on transactions held on the Razorpay platform (February 2020 – now):
- Customers showed a 10% increase in digital spending between mid February and now
- UPI (19.6%), NetBanking (11.5%), and Wallets (10.3%) became the top 3 modes of payments during this plague
- As mentioned earlier, the fear of this outbreak brought down the contribution of the Travel sector by 30% and Hospitality sector by 12% (Typically, Travel and Hospitality account for approximately 10% of transactions on Razorpay)
- Fear of running out of home essentials made Grocery make its way into the top 3 sectors with a growth of 9%. Mutual Funds saw the highest growth of 33% in this period, and the Government sector followed by a 30% growth
- Number of online transactions has increased in Ahmedabad (by 11%), Hyderabad (by 7%) and Pune (by 5%)
- Cities which otherwise saw only an upward growth dropped this time – Bangalore (by 3.2%) and Delhi (by 2.6%)
Reacting to the global economic disruption that Covid-19 is creating, Harshil Mathur, CEO, and Co-founder, Razorpay said,“From a macroeconomic perspective, we are seeing an increase in the demand for digital payments across a few sectors – Grocery, e-commerce and utility bills have gone up, given the social isolation. On the flip, people are having to stay indoors and not having enough spending power, this can make the overall consumer spending go down creating a lasting (negative) impact. Nevertheless, we are all prioritising the right things now to ensure that the health of all of us is being taken good care of.”
He added, “At times like this, we not only need companies, scientists, clinicians and technicians but also the government to come together and build a cross-industry rapid response team. A partnership like this will not only help protect us from this pandemic, but will also prepare us to respond better and faster to any global health crises that might occur in the future.”
While there is hope for a quick recovery and a rapid eradication of the virus, the company urges the world to not give up, and continue to take measures and precautions to ensure the well-being of one and all.