Chennai: Tamilnadu is the fourth highest contributing State in digital transactions in the country, with Chennai contributing the highest, said a new survey released here.
Chennai made up of 57 per cent in digital transaction volume, followed by Coimbatore, Tirupur, Salem and Erode. Overall, the city stands sixth in digital payments adoption among Indian cities in Q1.
Released by converged payments solution company Razorpay, the report titled ‘The Era of Rising Fintech’, said credit and debit cards are the highest contributors in the P2M segment in Chennai, with an estimated share of 55 per cent, followed by Netbanking (24 per cent) and UPI (20 per cent) in April-June period.
UPI transactions in the city grew by 57 per cent in the last quarter when compared to the previous quarter, it added. The report takes the period of January to June (H1) this year, into consideration.
According to the report, Google Pay continues to be the most preferred UPI mode with a contribution of 72 per cent in April-June (grew by 59 per cent from in January-March)
Although PhonePe contributed 14 per cent in April-June, it saw the highest adoption growth of 66 per cent since January-March, it said.
Top three sectors for digital payment growth in April-June were food and beverages (31 per cent), gaming (13 per cent) and financial services (12 per cent). The gaming industry witnessed a 244 per cent growth in the last quarter due to World Cup and IPL, among other sports events, it noted.
Overall, Bangaluru tops the list of most digitised cities in the country followed by Hyderabad, Mumbai, Pune and Delhi. The top five States include Karnataka, Maharashtra, Delhi, Tamilnadu and Andhra Pradesh.
Nationally, credit and debit cards are the highest contributors in the P2M segment with an estimated share of 50 per cent in April-June and 56 per cent in January-March. Usage of cards grew by 22 per cent from the first three months to the second.
UPI followed the race with 34 per cent and net-banking with 13 per cent, said the survey. UPI contribution witnessed a growth of 71 per cent over the last two quarters.
As with Chennai, Google Pay continues to be the most preferred UPI app nation-wide with a contribution of 57 per cent. Although PhonePe contributed 26 per cent, it saw the highest adoption growth of 82 per cent since January-March. Other players, BHIM (eight per cent) and Paytm (seven per cent) continue to decline in UPI contribution, compared to January-March period.
Share of wallets increased by 19 per cent from January-March to April-June and the highest contributing wallet was Ola, noted the report.
Razorpay predicts that 40 per cent of digital payments transaction will be driven by tier II businesses and consumers by 2020. In financial services, lending will be a new growth sector in India making massive progress with 76 per cent contribution in the last quarter, followed by the mutual funds sector, it said.
With a larger number of Indians acquiring access to financial services, the need for the government to regulate these services and the service providers also becomes of paramount importance, said the firm and added that it expects the government to introduce new incentives to widen digital payments in India.
For India to unleash the potential of fintech in banking, collaboration and innovation between banks and fintech firms will be key this year as mobile payment volume is expected to increase 10-fold by 2021. The report also expects that 15 per cent of India’s GDP will be flowing through digital payments by 2020.
| Expert speak |
| “Tamilnadu is among one of the most developed States in India and clocks about seven per cent GDP growth, year-on-year. Other than Chennai contributing the highest number of digital transactions in Tamilnadu, we noticed that lending is one of the upcoming growth sectors with a 69 per cent contribution in the last quarter. With the increasing usage of UPI access to the internet, the shooting demand for digital payments implies a lot more than just business growth in Chennai. It is a testimony of growing trust, the changing mindset of traditional businesses and focused effort of government and public authorities towards developing the fintech infrastructure. In the coming months, I am certain that Chennai will create a larger impact in the digital payments ecosystem, and considering the pace at which FinTech is transforming, Razorpay is excited to be an invaluable part of this journey,” said co-founder and CEO, Razorpay, Harshil Mathur. |