The COVID-19 pandemic has acted as a second wave of behavioral shift after the demonetization in 2016, which has pushed many users to adopt digital payments as they seek convenience and adhere to safety precautions. We see an opportunity to go digital during these unprecedented times.

MSC’s analysis of select payments system indicators in India during Q2 2020 indicates that the payment systems on the country are dependable and durable and continue to command a high level of confidence from the mass market. The study covers five categories of payment system indicators—currency with the public (cash), contactless payments (UPI, BBPS, BAP), Aadhaar-enabled Payment System (AePS), card-based payments and transactions (debit cards, credit cards, RuPay debit cards), and remittances and money transfers (RTGS, NEFT, IMPS, APBS).

The study highlights that despite the lockdowns, the demand for cash as a “safe asset” continues to rise, particularly among low- and moderate-income communities as they prepare to weather difficult days ahead. Contactless payments, such as the UPI, BBPS, and BAP, have made a near v-shaped recovery in Q2 2020 and are back to pre-COVID-19 levels. Payments systems, such as AePS and BBPS, have been stress tested with double their historical average. Read more here.

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