Groceries, Restaurants, Games Categories See Maximum UPI Transactions In August

Groceries, restaurants, pharmacies, and games were among the top categories in terms of transactions via the Unified Payments Interface (UPI) in August, data from the National Payments Corporation of India (NPCI) showed.

The NPCI classified the UPI merchant categories in terms of approved UPI transaction volumes and divided them into three broad segments – high transacting categories, medium transacting categories, and all other categories.

As per the data, the 10 high transacting categories were groceries and supermarkets, telecommunication services, eating places and restaurants, digital goods like games, miscellaneous and speciality retail outlets, drug stores and pharmacies, among others.

On the other hand, the 10 medium transacting categories included payments at bakeries, debit, department stores, for utilities like electricity, gas, water, payments at bars, taverns, night-clubs, cocktail lounges, dairies, and card to wallet credit.

The advent of UPI provided a boost to digital payments in the country and has played a key role in the rise of non-cash transactions in the country. The cash crunch in the country following the government’s move to demonetise INR 500 and INR 1,000 currency notes in 2016 further led to a rise in digital payments, with people not only in Tier 1 cities but even from rural and remote areas slowly adopting digital modes of payment, especially UPI.

In August, UPI saw a total of 657 Cr transactions, a 5% month-on-month (MoM) growth. Meanwhile, the transaction volume also increased to INR 10.72 Lakh Cr ($135.10 Bn) from INR 10.62 Lakh Cr in July.

On a year-on-year basis, the transaction volume in August was up 76% from INR 6.07 Lakh Cr.

In terms of app-wise break-up, PhonePe maintained its market share of nearly 50% last month, leading in both the count of customer transactions as well as value.

On the other hand, Google Pay ranked second in August with a market share of 33.76% in transaction numbers and 34.5% in terms of the value of transactions.

The NPCI’s August data also suggested that the other transacting categories, which had lower volume, included payments at tolls and bridge fees, electronics shops, cable and other pay television services, stationery, office supplies, among others.

While the UPI transaction volume is on a rise across segments in the country, India’s cash in circulation also increased by 9.2% as of March 2022, hitting an all-time high of INR 31 Lakh Cr.

However, Finance Minister Nirmala Sitharaman last week said that UPI is targeting crossing 1 Bn transactions per day in the next five years. 

Besides, the Reserve Bank of India’s decision to allow linking credit cards with UPI is also expected to further boost transactions. It is under a pilot phase currently, with linking of RuPay credit cards to be allowed first.