2020 will always be remembered as the year of lockdown which compelled people all across the world to stay indoors for almost a year. Naturally, more people opted to use online platforms for all the goods and services they needed. This resulted in bringing a huge boost to online payments, especially in India.
In FY20, the number of digital payments breached the 30 billion mark and the value of such transactions went past the Rs. 3 lakh billion mark for the first time in India.

Due to the adoption of digital services during the pandemic, transactions and spending in the e-commerce, entertainment, and over-the-top (OTT) segments increased by more than 100 percent in 2020, said a recently released report by PayU. The report by the online payment solutions provider stated that OTT segment witnessed an incredible 144 percent increase in online transactions; in the edu-tech sector there was a 139 percent jump in expenditure between 2019 and 2020.

The report by PayU specifies that states in North-Eastern India have seen a huge increase in digital adoption. The highest increase was witnessed in Nagaland (93 percent), Meghalaya (82 percent), Manipur (74 percent), Arunachal Pradesh (66 percent), and Tripura (63 percent).

At the same time, as per the PayU trends survey, travel and hospitality were among the most impacted industries, with an 86 percent decrease in transaction and expenditure between pre-and post-COVID quarters (January-March compared to April-June 2020).

"The gaming segment saw a phenomenal 100 percent increase in expenditure and a 154 percent increase in average ticket size between the two years," the report said.

Between the first and last six months of 2020, the retail and e-commerce divisions saw a huge 106 percent growth in transaction volume and a 124 percent increase in expenditure.

In India, the period between October and December is the festive season where expenditure normally increases. As compared to the same timeframe the previous year, PayU saw a 45 percent increase in online transactions during this period (October-December 2020).In line with the trend, the report states that PayU processed nearly 100 million transactions in a single month during the festive season (15 October - 15 November 2020).

The edtech industry has reached new heights as a result of the pandemic's effect and the lockdown's rapid acceptance and penetration. Though the sector faces many challenges such as sustainability, overcoming infrastructure hurdles, and retaining growth, the growth has been huge. Between 2020 and 2019, the edtech sector saw a 78 percent growth in transactions and a 44 percent increase in spending.

Despite the fact that the edtech segment grew, the average ticket size shrank by 19 percent, likely due to lower course prices in response to increased demand.

As the pandemic continues, the demand for work from home and online education is still on the rise. In fact, the number of transactions for edtech increased by an incredible 69 percent immediately after the lockdown.
"Though the edtech segment witnessed growth, the average ticket size reduced by 19 percent, possibly as course prices dropped in response to a surge in demand," the report said.

The pandemic boosted online payments significantly, as evidenced by a year-over-year rise of 24% in transaction volume and 23% in expenditure across the PayU network.

Meanwhile, the number of transactions on online food aggregators declined by 28 percent. This is possibly because although fewer orders were placed, consumers preferred to shop from more expensive, branded food outlets that would guarantee hygiene.

The number of financial services transactions (lending, insurance, savings, etc.) increased by 26 percent, while expenditure increased by 31 percent year over year. Consumers sought risk management during unpredictable times, which resulted in a 59 percent rise in investment and insurance transactions and a 53 percent increase in spending.

“As a leader in the Indian digital payments industry, and the preferred partner for India’s largest online businesses, PayU has a unique vantage point in capturing evolving year-on-year trends. It is a pioneer in driving value addition for merchants and banks through data insights, offering targeted solutions that allow them to deepen customer engagement and create actionable business strategies. PayU is committed to partnering with merchants to facilitate the adoption of digital infrastructure,” said Hemang Dattani, Head, Data Intelligence, PayU.

PayU India is the flagship company of the Naspers Group, an internet and media conglomerate with stock exchanges in London and Johannesburg. PayU's technology offers payment gateway solutions to online businesses. itis also the preferred payments partner for nearly 60 percent of e-commerce merchants in India, including all major e-commerce firms and the majority of airline businesses, and supports over 4,50,000+ merchants with over 100+ payment methods.