The Impact of Covid 19 On Digital Payment
The Impact of Covid 19 On Digital Payment
The Impact of Covid 19 On Digital Payment
Volume 5, Issue 2
ISSN 2456-3684
RESEARCH SCHOLAR
DEPAERTMENT OF COMMERCE
COIMBATORE
The ongoing spread of COVID-19 has become one of OBJECTIVE OF THIS PAPER
the biggest threats to the global economy and financial
markets. To contain the impact of the coronavirus To understand the concept digital payment.
outbreak, India, like many countries across the globe, To analyse the impact of COVID 19
which is made through digital mode. All the to the poor via direct transfers to bank accounts .The
transactions are done through online. We are all live in finance minister and the CEO of the National
the era of digitalization, there are many modern Payments Corporation of India urged people to
payment instrument used by various financial increase the use of digital payments in order to make
payments contactless. Digital payments, once a
institutions for delivering transactions through online
convenience, have become a necessity in these times.
.Mobile wallet, credit card and debit card, Aadhar
With a majority of the sectors that contribute to digital
enabled payment system, USSD and UPI are the
important digital payment. payments still in a state of flux, it is still too early to
ascertain the long-term impact of COVID-19 on
IMPACT ON BUSINESS digital payments.
Aviation An acquirer with large exposure to the aviation industry is at risk due to the
threat posed by increased refunds and charge backs as flights are cancelled
across the board.
Tourism and hospitality Acquirers having large exposure to the hospitality industry will face
headwinds as complete the lockdown restricts business to a very large extent.
Electronics and consumer Volumes of payment companies having clients in the electronics and
durables consumer durables segment will take a hit owing to the disruption in supply
chains, delivery and demand.
Hotels and restaurants The lockdown has caused severe loss of business for restaurants and hotels.
The restrictions on travel have hampered the peak season for many. This in
turn will have an adverse impact on payment volumes.
Physical retail (non-essential) Non-essential physical retail has also taken a hit as forced closure has resulted
in loss of business. Payment companies will see a marked decline in these
transactions.
Small and medium businesses Players with exposure to SMB and capital loans will be negatively impacted
and capital loans as working capital dries up for many players owing to temporary closure of
businesses, impacting repayments and increasing the possibility of non-
performing assets (NPAs).
Cross-borderpayments Payment companies with large cross border transactions will be impacted as
supply-side uncertainties, factory closures and trade barriers are affecting
cross border trade.
Payment fees – card schemes Major card schemes have delayed the roll-out of their new interchange fee
structure. Sectors like real estate and auto would see rate decreases, while
growth sectors like e-commerce and mobile ordering would see a hike in fees.
Overall network fees would decrease for card schemes.
Physical retail (essentials) With concerns of transmission of the virus through the exchange of physical
currency, digital payments at local grocery stores have increased. Payment
players having exposure to this category stand to gain.
Telecom Telecom companies will also see an increase in transactions as payments and
recharges shift to digital channels. Further, the boost in demand for broadband
internet services will also fuel the rise in transactions.
Insurance Owing to the COVID-19 pandemic, insurers have seen a rise in digital
payments as new and renewal policy payments are made online.
EdTech The lockdown and shutdown of schools and educational institutions have
proved to be a boon for EdTech companies, with an increase in demand for
their services enabled by online payments.
Domestic remittances The lockdown has caused severe loss of business for restaurants and hotels.
The restrictions on travel have hampered the peak season for many. This in
turn will have an adverse impact on payment volumes.
Healthcare/pharma Payment players associated with the healthcare/pharma sector will see an
increase in digital payments due to the COVID-19 pandemic.
E-commerce (essentials) Players catering to online selling of essential items have seen a surge in
transactions due to the lockdown. Payment processors having exposure to
such retailers stand to gain in relative terms considering the current situation.
Government Payments involving the Government(s) would increase on two counts: firstly,
the financial aid provided by the Government via Direct Benefit Transfer
(DBT) (G2P); and secondly, donations made to Government funds like PM
CARES and PMNRF. P2G would contribute to an increase in digital
transactions.
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International Journal of Commerce and Management Studies (IJCAMS)
Volume 5, Issue 2
ISSN 2456-3684
Payment systems have demonstrated that they are dependable and durable, and continue to command a high level of
confidence from the general population. However, closure of businesses and the lockdown have resulted in lower
transaction volumes overall. In this section, we look at the relative impact of the COVID-19 pandemic on various
payment categories.
Wallets Wallets will also see increased traction for P2P transfers,
bill payments and P2M payments for essential services
Issuance owing to the lockdown and aversion to exchanging cash.
However, some wallet players have increased their fees for
merchants and consumers, leading to merchants not
accepting their wallets for transactions.
Bank accounts Fund transfers to/from bank accounts will likely see an
uptick as people substitute cash with digital transfers.
www.tcs.com
Pavlo Sidelov ,”The world of digital payments:
www.bfsi.economic times.com
practical course” Ostap khanko,2017
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A.Franciska and Dr .S. Sahayaselvi, ”An
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