At a time when digital payments are almost everywhere, it is not wrong to assume that people carry less hard cash now. However, the scenario is not quite so. Data released by the Reserve Bank of India shows an increase in cash withdrawals from automated teller machines (ATMs) by 22 per cent in April from a year ago to Rs 2.6 lakh crore. This proves that despite the popularity and wide-scale usage of digital payments, people have not done away with carrying hard currency.
It must be noted that the figure of Rs 2.6 lakh crore is more than the average of round Rs 2.2 lakh crore that was registered in the months prior to November 8, 2016, when the government demonetized Rs 500 and Rs 1000, making them illegal tender from thereon.
There was a surge of 15 per cent in the number of times debit cards were swiped at ATMs across the country in April. From 660 million ATM transactions a year ago, the number jumped to 759 million, according to data.
However, the month of April also saw a rise in the usage of debit cards at PoS (Point of Sales) terminals. It went up to 333 million, from 268 million a year ago - an increase of 24 per cent. In October 2016, the number of times debit cards were swiped at PoS terminals was only 140 million.
According to The Economic Times, Navroze Dastur, Managing Director for India and South Asia at NCR Corporation, said that per day transactions at their ATMs have gone up, as well as the average ticket size of each withdrawal. Dastur says that this shows how both modes of payment are here to co-exist and none can replace the other.
Dastur further added that the average cash withdrawal from their ATMs and the average number of transactions per machine had both gone up. While the average cash withdrawal from their ATMs had seen an increase to Rs 3,450 from Rs 3,000, the number of transactions per machine had gone up to 125 from 120.
ATM withdrawals are likely to go up with the growth of the economy and more cash in circulation. According to the daily, Ravi Goyal, Managing Director at AGS Transact that deploys both ATMs and digital payment options for banks, said that the amount of cash withdrawn from ATMs currently is Rs 19 lakh crore - around 1.6 times the currency in circulation. He added, "This is being supported by demand for withdrawals in rural India in order to access DBT (direct benefit transfer) funds which are being put into bank accounts of the poor by the government."
However, there has been no increase in the number of ATMs deployed despite the cash withdrawals going up.