PayU released the PayU Insights Report, providing a comparative analysis of lockdown periods in 2020 and 2021, as seen through changes in digital payments transactions across the platform. The report provides insights into the impact across sectors as well as an overview of the Indian digital payments space. Year on year, there has been a 52% increase in the number of transactions and a 76% increase in expenditure (May 2020 vs. May 2021). Compared to pre lockdown months, there was a 10% increase in the number of transactions post lockdown 2021, and a 21% decrease in average ticket size indicating that users are adopting online payments even for smaller size transactions. PayU is a pioneer in driving value addition for merchants and banks through data insights, offering targeted solutions which allow them to deepen customer engagement & create actionable business strategies.
Retail and e-commerce
Compared to lockdown 1.0, number of transactions grew by 260% and expenditure by 235%, year on year. There has been a 36% increase in number of transactions and 25% increase in expenditure during lockdown 2.0 vs pre lockdown months in 2021.
Online donations to charitable causes reach an all-time high in lockdown 2.0
Digital payments for charitable causes witnessed a massive 731% increase in the number of transactions, a 2308% increase in expenditure, and a 128% increase in average ticket sizevis a vis pre-lockdown months in 2021. Compared to lockdown 1.0, the number of transactions and expenditure increased by 575% and 476% in lockdown 2.0. As the second wave of the COVID-19 pandemic unfolded, numerous donation campaigns were organized by NGOs and crowdsourcing platforms to raise funds for COVID relief.
Logistics gains momentum, with partial and staggered lockdowns
In lockdown 2.0, the logistics sector recorded a 217% increase in the number of transactions and a 227% increase in expenditure, compared to lockdown 1.0. Interestingly, the logistics sector also maintained a steady 59% growth in the number of transactions and a 57% increase in expenditure compared to the months before lockdown 2.0. This could be attributed to larger usage of courier delivery services and purchase and transfer of essential items during the May 2021 period. It is also possible that incentives announced in Budget 2021, such as the scheme to boost digital payments may have improved sentiments for the sector.
Entertainment, gaming sees a downturn
The entertainment sector suffered from the impact of the second wave of the pandemic, as there was a 35% decline in the number of transactions, a 41% decrease in expenditure, and an 11% decline in average ticket size in lockdown 2.0 vis a vis pre-lockdown 2.0.
Gaming sector too showed a complete reversal of trends, with healthy growth in 2020 but decline in 2021. During lockdown 2.0, the number of transactions and expenditure decreased by a sizeable 63%, compared to pre-lockdown months. Whereas in lockdown 1.0 there had been an increase in the number of transactions. This could be because consumers moved away from non-essential spending, cancellation of IPL 2021, and general muting of sentiments during this phase.
The UPI juggernaut continues
Lockdown 2.0 recorded phenomenal growth for UPI as a payment mode. The number of transactions through UPI increased by 320% and expenditure increased by 306% in lockdown 2.0, compared to lockdown 1.0. The next highest growth in modes of payment was observed in credit card transactions, as the number of transactions increased by 87% and expenditure increased by 69% year on year. For net banking and debit card modes, the number of transactions grew by 12% and 6% respectively year on year.
Impact on travel
The number of transactions grew by 186%, and expenditure by 125% between lockdown 1.0 and 2.0. This is understandable, as travel rose once the economy opened and restrictions eased during a staggered lockdown. However, immediately after the lockdown in 2021, there was a 65% drop in transactions and a 78% drop in expenditure.
Commenting on the PayU Insights Report, Hemang Dattani, Head – Data Intelligence, PayU said “Broadly, businesses and consumers were better prepared to deal with the exigencies of lockdown in 2021. Given that the lockdown was staggered and geographically restricted, the growth of digital payments has been steady, especially for sectors like retail, logistics & pharma. As a leader in the online payments space, PayU is well placed to capture macro-economic movements and offers industry specific insight-based solutions, enabling merchants to glean actionable intelligence and enhance their business strategies.”
Other findings of PayU Insights Report
Pharmacy: Number of transactions grew by 78% and expenditure by 31% in lockdown 2021, compared to pre-lockdown months. Year on year there was a 9% decrease in number of transactions, & 22% decrease in expenditure.
Groceries: Year on year, number of transactions grew 171%, with 108% growth in expenditure. There was a 52% increase in the number of transactions post lockdown 2.0, compared to pre-lockdown months in 2021.
Education: Compared to lockdown 1.0, although the number of transactions declined by 31% expenditure grew by 37% in lockdown 2.0.
Recharge and utilities payments: Compared to pre-lockdown 2.0, the number of transactions grew by 68%, and expenditure by 11%.