Indians still prefer cash despite growth in digital payments, average ATM withdrawal amount hits record high
New Delhi: Despite the growth of digital payments in india, cash still remains the first choice among Indians. On an average Indians are withdrawing Rs 5,000 from ATM at one go, which is a record high.
According to a report in the Times of India, the average ticket size of transactions went up to Rs 4,959 per ATM withdrawal from debit cards in August as cash in circulation hit a record high of Rs 26 lakh crore (12% of GDP).
While cash withdrawals have risen around 10% since last November, UPI payments have shot up by close to 20% during the period to an average ticket size of Rs 1,850, the publication mentioned.
Although there was a temporary slowdown in cash withdrawal in the first few months of lockdown, it shot up later to pre-Covid levels, say industry players.
“With the lockdown measures across the country, a drastic dip in ATM transactions were observed in end-March, April and May. The situation slowly improved from the month of June,” the publication quoted Hitachi Payment Services MD and CEO Rustom Irani as saying.
Cash withdrawal data for the last three months is still not available but ATM and point of sale machine operator BTI Payments CEO K Srinivastold the publication that cash withdrawals were far higher than last Diwali as people stepped up purchase of gifts and sweets.
“We believe that people generally tend to hoard cash for contingencies in an emergency situation like the ongoing pandemic. This coupled with the steady opening up of economic activities and the ongoing festive season have resulted in an increase in average ATM transactions,” Hitachi’s Irani added.
Another trend that was highlighted by ATM players as per the publication is that people are no more withdrawing small amounts of Rs 100-300 from ATM. “With the rapid adoption of UPI, small ticket transactions have shifted almost entirely to digital. Now, people withdraw higher amounts; also, with the pandemic no one wants to step out more often than required. So, people tend to withdraw their needs for a week,” BTI Payments’ Srinivas told the daily.
Since January 2020, RBI changed its method of collecting data, so the previous year’s figures for ATM withdrawals are not direct comparables with this year’s figure.