Kirana stores witness 96% rise in AePS transaction volumes during lockdown

by Suman Gupta

PayNearby releases detailed analysis on ‘assisted digital transactions’, amid Covid-19 – a Pan-India report titled

Retail-O-Nomics

• Overall assisted digital transactions at retail outlets saw a rise of 46% in volumes during the lockdown

• Rural and semi-urban areas witnessed a growth of over 60% in volumes during lockdown

• Metros witness a jump of 121% in transaction value during unlock phase as compared to lockdown

• Domestic Money Transfer (DMT) which saw a sharp de-growth of more than 85% in the first two months of the lockdown, witnessed a rise of over 100% in both value and volumes in unlock phase

• Demand for micro ATMs / m-POS instruments saw spurt of 67% during unlock

Mumbai, January 12, 2020: PayNearby, India’s largest hyperlocal fintech start-up, today said that there was a rise of 96% and 27% 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% and 60% in transaction volumes.

The insight was shared as part of a detailed analysis on ‘assisted digital transactions’, amid Covid-19 – 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.

While there was a minor blip (less than 2%) 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% in the same period. This represented a dip in the average ticket size owing to cautious sentiments, reduced purchasing power and largely small ticket DBT withdrawals. It also represented reduced transactions from metro and urban areas, which witnessed a sharp dip of 32% and 64% respectively in gross transactional value (GTV), led primarily by the dip in money transfer business.

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 gross transaction value (GTV) grew by more than 17%, while transactional volumes dipped by about 7%. It was reflective of revival of money transfer, travel and utility payment businesses, and signified a return of larger ticket size transactions.

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% in the first two months, and started picking up again by late July. With the advent of the unlock phase, remittance business saw a V shaped recovery and registered a growth of 106% and 100% in value and volume respectively vis-à-vis during lockdown.

Similarly, 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% in GTV. In the unlock phase however, these transactions picked up by almost 67% in volumes and 76% in value.

Travel bookings inclusive of bus, rail and air at retail outlets during the lockdown phase witnessed a dip of over 75%. 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%, 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% and 34% 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% 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.

In another interesting observation, the report stated that 48% of the total transactions were registered at Kirana stores between 7 AM to 2PM. Significant amount of transactions, almost to the tune of 52% 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.

Commenting on the report findings, Anand Kumar Bajaj, MD & CEO, PayNearby, said, “India was future proofed by NPCI and Nandan with AEPS. The fact that during lockdown, 115 Mn debit cards were out of 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 Government of India. The same is reflected in our data, where the disbursal of Direct Benefit Transfer (DBT) wouldn’t have been possible without 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.

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.

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.”

The company shared that while the monthly gross transaction value (GTV) at an overall business level dipped marginally (less than 2%) during the lockdown phase, transaction volumes saw a huge spurt of more than 45%. This represented a dip in the average ticket size of transactions owing to cautious sentiments, reduced purchasing power and largely small ticket DBT withdrawals. It also represented reduced transactions from metro and urban areas, which witnessed a sharp dip of 32% and 64% respectively in gross transactional value (GTV), led primarily by the dip in money transfer business.

However by August, as migrants moved back to their work locations and money transfer business saw a revival with the unlocking of Indian economy, digital transactions at retail outlets reported an overall growth of 17% during the unlock phase, the company reported a growth of 17% in the overall monthly business value. The transaction volume during this period saw a dip of around 7%, signifying a return of larger ticket size transactions.

© 2020 Nearby Technologies Private Limited. All rights reserved.

About Nearby Technologies Pvt. Ltd.:Incepted in April 2016, Nearby Technologies is a fintech company offering financial/non-financial services to the underbanked and unbanked segment. Nearby Technologies works on a B2B2C model through its various brands – PayNearby, Insure Nearby, BuyNearby and few more. PayNearby empowers retailers at the first mile to offer digital services to local communities, thereby boosting financial inclusion in India. Retailer services are focused on Aadhaar based banking services, Domestic Remittances, Bill Payments, Card Payments, and insurance services among others.

It was founded by Anand Kumar Bajaj, Subhash Kumar, Yashwant Lodha & Rajesh Jha who bring with them rich experience in the field of banking, payments and other financial sectors. PayNearby is a DIPP-certified FinTech startup, partnering with various financial institutions including YES Bank, RBL Bank, ICICI Bank, State Bank of India, Axis Bank, CC Avenue, Bill Desk, NPCI, FASTag, NBFC and FMCG companies. It is the sole technology provider using Aadhaar Enabled Payment Services (AEPS) and IMPS to YES Bank, making them one of the only two fintech companies hosted by the National Payments Corporation of India (NCPI).