Kiranas Witness 96% Rise In AePS Transaction Volumes Amid COVID-19

According to a report by PayNearby, overall assisted digital transactions at retail outlets saw a rise of 46 per cent in volumes during the lockdown

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Mumbai-based hyperlocal fintech startup PayNearby on Tuesday said there was a rise of 96 per cent and 27 per cent in volume and value, respectively, in AePS withdrawals (Aadhaar ATMs) at kirana outlets across the country during the lockdown. This growth was a direct result of the various relief funds disbursed by the government to support citizens during the pandemic and was primarily led by rural and semi-urban areas, which witnessed a growth of 61 per cent and 60 per cent in transaction volumes. 

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The insight was shared as part of a detailed analysis on assisted digital transactions, amid COVID-19, in a Pan-India report titled Retail-O-Nomics, released by PayNearby. The report has been prepared basis transactions registered across more than a million retail touchpoints across the country.

According to the report, while there was a minor blip of less than 2 per cent in the overall gross transaction value of assisted digital transactions at retail stores in the initial months of the lockdown, transaction volumes saw a huge spurt of more than 45 per cent in the same period. This represented a dip in the average ticket size owing to cautious sentiments, reduced purchasing power, and largely small ticket direct benefit transfer (DBT) withdrawals. It also represented reduced transactions from the metro and urban areas, which witnessed a sharp dip of 32 per cent and 64 per cent respectively in gross transactional value (GTV), led primarily by the dip in money transfer business.

“India was future-proofed by NPCI and Nandan with AEPS. The fact that during the lockdown, 115 million debit cards were out of the system due to non-compliance with CHIP & PIN guidelines, but AEPS came as a BCP for ATM, helping people access the essential money remitted by the Government of India. The same is reflected in our data, where the disbursal of Direct Benefit Transfer (DBT) wouldn’t have been possible without the AEPS withdrawal facility in the region. These findings also reveal the tireless efforts of the retail agents who ensured they remained available to the masses at all hours of the day. When the entire country was held hostage by the pandemic, these agents served as corona warriors that kept the economy going,” stated Anand Kumar Bajaj, managing director, and chief executive officer, PayNearby, while commenting on the report findings.

However, by August-end, as migrants started moving back to their work locations and India entered into an unlocking phase, the overall gross transactional value of digital transactions at retail outlets saw a revival and growth. The average monthly GTV grew by more than 17 per cent, while transactional volumes dipped by about 7 per cent. It was reflective of the revival of money transfer, travel, and utility payment businesses, and signified a return of larger ticket size transactions, a statement in the survey said.

“It is heartening to see an accelerated demand within the retail community to enable assisted financial transactions at local stores during these challenging times. We witnessed a sharp growth in retailers who wanted to join the program, and added more than 3 lakh registered retailers during this time,” Bajaj added.

When the economic crisis intensified during the lockdown phase, the country witnessed a mass movement of the migrant community from metros to their respective hometowns. During this period, domestic money transfer (DMT), or the amount of money migrant workers send home, saw a sharp decline of more than 85 per cent in the first two months, and started picking up again by late July. With the advent of the unlock phase, the remittance business saw a V-shaped recovery and registered a growth of 106 per cent and 100 per cent in value and volume respectively vis-à-vis during the lockdown, the report further said.

“The rise in Micro ATM, mPoS, and other digital payment transactions are indicative of the huge latent demand that exists for easy to use digital payment technology across the country, especially in Tier 2 and beyond regions. Our focus will be to empower our retailers and consumers by blending easy to use technology with last-mile connectivity so that we can bridge the digital divide and create an equal Digital India,” Bajaj further said.

It has been further found in the survey that during the lockdown phase, owing to strict social distancing norms and getting a moratorium even on bill payments, people avoided stepping out of their homes to pay their bills, on account of which utility bill payments at kirana stores witnessed a clear drop of 23 per cent in GTV. In the unlock phase, however, these transactions picked up by almost 67 per cent in volumes and 76 per cent in value.

Even travel bookings inclusive of the bus, rail, and air at retail outlets during the lockdown phase witnessed a dip of over 75 per cent. However, by mid-August, as travel restrictions were relaxed, essential travel started again, and India witnessed a large movement back of the migrant workforce. Travel bookings bounced back and registered a steep growth of over 100 per cent, led primarily by a steep rise in rail and bus bookings.

Mobile recharges, another popular offering at small retail outlets across the country witnessed a rise of 39 per cent and 34 per cent in value and volume respectively during the lockdown phase, which suggests the rise in consumption of data and talk-time when most people were forced to stay at home.

Interestingly, demand for micro ATMs/m-POS instruments at retail outlets across the country witnessed a whopping rise of 67 per cent in the unlock phase which underlines the critical role played by these small retail outlets in bridging the infrastructure gap while also driving financial inclusion at the last mile, the report maintains.

In another observation, the report stated that 48 per cent of the total transactions were registered at kirana stores between 7 am-2 pm. A significant amount of transactions, almost to the tune of 52 per cent were registered during the non-banking time zone which underlined the crucial role these kirana outlets played in these challenging times in the wake of social distancing and restricted banking hours.