Demand for cash surged amid the first wave, primarily because people started hoarding, fearing the imposition of a complete lockdown. In addition, with the lockdown measures and social distancing norms, restaurants, malls and retail outlets being closed resulted in a drastic decline in the usage of cards, whilst replacing cash for daily errands.

The second wave witnessed states imposing stricter lockdowns and with social distancing norms people have not been venturing out to banks and ATM as frequently. This has encouraged people to resort to cash withdrawals in a big way.

We have witnessed a rise in the average ticket size of withdrawals at any given time which has gone up by almost 20%. This is largely because people withdraw in larger quantities and prefer to hoard, pre-empting medical or any other form of emergencies, which has ultimately increased cash in circulation.

Interestingly, with an increase in e-commerce, COD (cash on delivery) has also witnessed a huge spike which is yet another reason for the surge in cash transactions. While people who never transacted online have adopted e-commerce shopping they still insist on seeing the product before buying besides avoiding issues such as delivery delay and online frauds and hence prefer the COD mode. Thus cash stays strong with growth in e-commerce.

In yet another interesting trend ensued by the pandemic, small ticket transactions have been replaced by UPI and QR Code. Circulation of lower denomination notes like 20, 50 and 100 witnessed a dip since retailers struggled with a lack of cash, especially during peak hours.

Besides with consumers getting increasingly accustomed to digital and contactless transactions, UPI and QR codes have become the most preferred mode especially for small-ticket transactions such as visiting a doctor's office, buying things from Chemists or making payments at a supermarket.”

The author is Founder and Managing Director, Sarvatra technologies. Views are personal.