In a year bogged down by pandemic-driven lockdowns and social distancing, online transactions grew by 80 per cent in India as compared to 2019, suggesting a significant adoption of digital payments by consumers and businesses alike especially from the smaller cities, a new report said on Tuesday.
The tier 2 and 3 cities were a major driver for online transactions inlets year and witnessed 92 per cent growth, according to the report by fintech unicorn Razorpay.
Consumers moved to online to make most of their payments, making the Bill payments/utility sector witness a sizable growth of 357 per cent.
The UPI transactions outgrew cards, net banking and wallets with 120 per cent growth in a year, becoming the most preferred mode of payment especially for Tier- 2 and 3 cities, the findings showed.
“While the overall transactions in 2020 significantly grew compared to the last year, what I’m really excited about is that it grew by about 73 per cent in the last six months alone,” said Harshil Mathur, CEO and Co-Founder, Razorpay.
“So much so that the transactions from tier 2 and 3 cities grew by about 92 per cent in a year. This is the first time that we’ve seen such a spectacular growth from these parts of the country,” Mathur added.
The report mentioned that mutual funds grew by 382 per cent in a year, indicating a ripe time for investments as consumers viewed the market corrections as an opportunity rather than a threat.
“With every service moving to virtual platforms, the education, e-commerce and healthcare sectors also witnessed a significant growth of 167 per cent, 189 per cent and 148 per cent, respectively.
The logistics sector also showed a slight growth of 18 per cent in 2020.
“Businesses are beginning to stabilise and some of them are even back to pre-Covid levels,” Mathur said.
In the last six months, Razorpay witnessed a 40-45 per cent month-on-month growth.
Razorpay currently facilitates payments for over 5 million businesses including Facebook, Airtel, BookMyShow, Ola, Zomato, Swiggy, Cred and ICICI Prudential, among others.
According to the company, it is all set to reach 10 million businesses in 2021.