 "HDFC Bank")
With easing of the liquidity crunch, transaction volumes for overall retail electronic payments has seen a marginal dip in the past few months, suggesting a slow reversal in the usage of digital platforms, says a report.
According to HDFC Bank, the argument that decline in currency with the public from the pre-demonetisation levels implies a structural drop in cash usage is "perhaps misleading".
Going by data compiled by HDFC, the volume of retail electronic transactions peaked to 1.30 billion in December, last year, after demonetisation was announced by the government on November 8 as part of its drive to counter black money menance as well as promote cash-less culture. However, since then the volume of retail electronic transactions has steadily been below the 1.30 billion level.
"After an initial spike in digital payment methods, there is anecdotal evidence that some smaller merchants are reverting to cash," the report said.
"With the easing of the liquidity crunch, transaction volumes for overall retail electronic payments have seen a marginal dip," it added.
The report noted that there has been a gradual tapering in volumes M-wallets as well after the initial bounce.
"This prima facie would suggest a slow reversal in the usage of digital platforms," HDFC said.
However, the report observed that a complete return to the pre-November 8 trends has not yet happened, holding out the possibility that there has been some behavioural change in the transactions patterns.
"Whether the big jump above trend represents a short-term blip, or whether demonetisation has given a structural push to the already rising trajectory of digitisation, remains an open question," it said.
