NEW DELHI: Unified Payments Interface (UPI)-based payments grew 12% sequentially, clocking 1.49 billion transactions in July and hitting yet another high since its launch four years ago, data released by National Payments Corp. of India (NPCI). As many as 822 million transactions were clocked in July, 2019.
Such transactions were worth ₹2.90 trillion compared with ₹2.61 trillion in June and ₹1.46 trillion a year ago. As of July, 164 banks were live on UPI against 155 in June.
The latest data not only indicates a sharp recovery after payment transactions declined during April-May due to the stringent lockdown, and a consequent dip in demand, but also a larger shift towards online payments as people feared touching currency notes amid the pandemic. Such payment transactions bounced back to pre-covid-19 level in June as the government eased lockdown restrictions across the country.
Transactions via Immediate Payment service (IMPS), which also allows transferring of funds instantly within banks across India, grew 11% sequentially to reach 222 million transactions in July. Such transactions were worth ₹2.25 trillion. Similarly, online utility payments via Bharat Bill Payment System also continued to rise. 20.16 million transactions worth ₹3,707 crore were clocked under BBPS--an interoperable platform that enables a customer to pay bills such as telephone, water, gas, direct-to-home (DTH), electricity, school fees, and municipal taxes, among others, at a single location— electronic or physical. As many as 17.64 million transactions worth ₹2,969 crore were clocked in June.
After demonetization—the government’s massive currency culling exercise--covid-19 has become a significant turning point towards adoption of digital payments landscape in the country. Over the last few years, the government and the Reserve Bank of India (RBI) have given massive thrust to digital payments to use it as a tool for economic development as it is fast, cost effective and increases transparency and accountability. With the outbreak of the pandemic, the citizens have been encouraged to use make payments online to reduce exposure at crowded places.
According to a report by Payments Council of India (PCI) and Pricewaterhouse Coopers (PwC), India will contribute 2.2% to the world’s digital payments market by 2023, while the value of such transactions is expected to reach $12.4 trillion globally by 2025. It has estimated that UPI transaction volume will hit nearly 59 billion by 2023 owing to its high peer-to-peer (P2P) type of transaction penetration.