Search giant Google’s online payment arm Google Pay recorded more than 240 Mn transactions in May. With this, Google Pay takes the leading position in UPI transactions volume for last month.
Citing anonymous sources, an ET report said that Flipkart-owned PhonePe took the second position after recording 230 Mn UPI payments last month, while Paytm clocked in 200 Mn transactions.
These three digital payment giants along with central government backed Bharat Interface for Money (BHIM) were responsible for driving more than 93% of the UPI transactions market.
In terms of the value of transactions, the money transferred via Google Pay was the highest at INR 55K Cr, followed by PhonePe at nearly INR 44K Cr and around INR 38.2K Cr using Paytm.
National Payments Corporation of India (NPCI)’s own payment app BHIM recorded 15.7 Mn transactions in May. It constituted for only 2% share of the total UPI transactions last month, down from more than 7% in May 2018 and 42% in 2017.
This development comes right after it was reported that UPI has clocked in 733.54 Mn transactions in May 2019. This is a 6.17% decline from the total number of transactions last month when UPI recorded 781.79 Mn transactions. However, while the number of transactions has reduced, the transaction value has increased from $20.42 Bn (INR 1,42,034.39 Cr) in April to $21.91 Bn (INR 1,52,449.29 Cr) in May 2019.
Prior to this, the total number of UPI transactions also fell to 781.79 Mn transactions in April from 799.54 Mn transactions in March. This marks a continuous month-on-month decline in UPI growth.
According to the sources, there are two major reasons behind this fall, reduced cashbacks and outages in a few banks’ backend, which led to an increase in transaction failure.
UPI was launched by the NPCI in 2016 to allow users to transfer money immediately using a mobile. It allows peer-to-peer money collect request which can be scheduled and paid as per requirement and convenience. Since its inception, UPI has received strong support from the government.
The biggest boost for the digital payments came when the government announced demonetisation in November 2016 and removed INR 1,000 and INR 500 currency notes.
Following this, the Central government has been taking several steps to digitise the mode of transactions and make India, a cashless society.
Recently, the Ministry Of Electronics and Information Technology (MeitY) asked Paytm to support its target of facilitating 40 Bn digital transactions in FY20. The MeitY has also directed the banks to deploy 8.5 Mn PoS terminals across rural areas and the northeastern states.
In April, it was reported that Nandan Nilekani-led Reserve Bank of India (RBI) committee is planning to recommend to make all government payments to citizens digital. In the same month RBI governor, Shaktikanta Das had said that the central bank will come up with a regulatory framework of customer-protection measures tailor-made for digital transactions.