Spending on goods and services weakened marginally in the first week of January amid a fresh surge in coronavirus infections and the clamping of some mobility restrictions by states and local authorities.

According to data released by the Reserve Bank of India (RBI), the value of digital transactions made through the different RBI and National Payments Corporation of India (NPCI)-operated channels stood at Rs 23.13 lakh crore from January 1-5, marginally lower than Rs 23.7 lakh crore worth of transactions during the first five days of December 2021. On a year-on-year (y-o-y) basis, the value of transactions in January 2022 was higher than the Rs 20.03 lakh crore worth of spends seen in January 2021.

Payment industry executives said that while the surge in Covid infections may not have been a dampener for consumption so far, there is a possibility that tighter restrictions may hurt spending.

Spends have not been hurt too much, and the fact that people are now vaccinated is making a difference, said a senior executive with a payments company. “We’ll have to watch how things pan out from here in case there are lockdowns. With the rise of delivery services, there will probably not be much of a problem in urban centres. In tier 2 and 3 centres, there could be an impact,” he said.

Transactions made through the Unified Payments Interface (UPI) remained among the most popular modes of consumer payments, crossing Rs 1.5 lakh crore in transaction value in the first week of January.

Experts say that part of the reason why digital transactions have held up is that consumers are now more used to making digital payments, given the experience of the last two years. Akash Sinha, co-founder & CEO, Cashfree Payments, said while the shift to digital payments is not new, it has seen a steady rise over the past two years.

“Amid Covid-19, India was home to the highest number of real-time online transactions in 2020 ahead of countries such as China and the US,” Sinha said, adding, “The good part is that the change in payment habits appears to be more permanent as digital payments have continued the same pace of growth in 2021, compared with 2020.”