COVID-19 brings about behavioural change in cash usage
New Delhi: The COVID-19 pandemic has brought about a behavioural change in usage of cash with people withdrawing larger amounts from ATMs but preferring to make digital modes to make payments, said experts.
The ferocity of the second wave of the coronavirus pandemic has scared people, forcing them to withdraw larger amounts from the ATMs with a view to avoid frequent visits. The money thus withdrawn is mostly held for emergency use and often payments are being made through UPI and other digital modes.
Sarvatra Technologies founder and MD Mandar Agashe said the average ticket size of withdrawals has gone up by almost 20 per cent as people withdraw in larger quantities and prefer to hoard, pre-empting medical or any other form of emergencies, which ultimately is not consumed as much.
He said UPI was taking care of small-ticket transactions with the average ticket size constant at Rs 1,000.
Daily average transactions on IMPS have now gone up to Rs 9,000 which was earlier in the range of around Rs 6,000-7,000, he said.
According to the RBI’s latest data, the outstanding currency in circulation on May 7 was Rs 2,939,997 crore, up from Rs 2,858,640 crore on March 26.
Care Ratings Chief Economist Madan Sabnavis opined that during these uncertain times, there is a preference for people to hold down to cash.
It is more for precautionary purposes because one needs cash for rainy days such as for medical reasons or for any sudden other expenses, said Sabnavis.
PayNearby founder, MD and CEO Anand Kumar Bajaj said the anxiety of lockdowns has forced people to withdraw money and to keep cash handy — both for medical emergencies and basic needs in these dire times.
Aadhaar ATM, which is the backbone for disbursing DBT to citizens, saw a huge surge across all PayNearby retail stores, primarily led by increased adoption in rural, semi-urban and tier-II towns, Bajaj said.
“Our annual figures reported AePS (Aadhaar-enabled Payment System) withdrawals worth Rs 10,000 crore in Q4 FY2021 as against Rs 7,650 crore vis-à-vis the same quarter last year.
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