An Analysis of how COVID-19 Revolutionized India\'s Payment Infrastructure

Abstract

Abstract: In the past decades, the number of trades in India has increased at a CAGR of 23 percent. 1 The introduction of fresh and novel financial services such as UPI for contactless transaction, NETC for contactless toll payments through Fast Tags, BBPS for contactless bill payments has securely positioned the cashless sector on an upward growing emphasis. This growing pace is anticipated to expand as innovative banking services and applications throughout industries emerge. The emergence of unique and modern merchant services, increased internet penetration, a rising desire for speedier financing options, and a significant boost from the administration and authorities to utilise online technologies have all led to the expansion in electronic transactions in India. Before 2010, online payments grew in the single figures. Between the year 2010 to 2016, this percentage increased to 28 due to the introduction of speedier financial mechanisms in the nation, then it skyrocketed to 56 percent just after demonetisation in the year 2016. COVID-19 has expedited the transition to online alternatives. UPI has had an incredible CAGR of 414 percent ever since inception in 2016 has become the foremost cashless transaction system in terms of scale. In addition to UPI, BBPS and NETC have increased at a comparable rate. Since 2018, BBPS and NETC have grown at CAGRs of 500 percent and 123 percent, accordingly, due to support from the government. Cashless platforms have moved from a being commercial entity for institutions to a profitability and crucial tool for acquiring customers. Keywords: COVID-19, Digital Payments, Online Banking, Digital Wallets, Digital Banking, Virtual Transactions, Pandemic