Average Ticket Size Improves But No Growth In Volume For UPI

After a yearly growth of 1.8X in 2019, the UPI (Unified Payments Interface) has started 2020 with a stagnant volume of transactions. The National Payments Corporation of India’s (NPCI) data showed that in January 2020, UPI recorded 1.31 Bn transactions, similar to the number of transactions of December 2019.

In terms of the value of transactions, the growth has been minimal i.e. 6.7%, reaching INR 2.16 Lakh Cr in January as against INR 2.02 Lakh Cr in December 2019. On further analysing the data, we noticed that the average transaction size in January grew to INR 1650.69 from INR 1545.96 per transaction in December 2019.

This can be seen as an improvement as UPI recorded a decline in average transaction value from September 2019 and is now looking to match up the average ticket value then.

The Share Of UPI In Digital Payments

In terms of UPI, Inc42 had earlier noted that the share of UPI to all digital payments in India is falling year-on-year. If we examine the share of UPI in digital payments, the share of the number of transactions has increased from 6.2% in FY18 to 22.89% in FY19. But at the same time, the share of UPI within digital payments in terms of value has seen a marginal fall.

In FY18, the share of the value of UPI transactions was 0.8% of the total value of digital payments for the year. But in FY19, the share of the value of UPI transactions was 0.5% of the total value of digital payments for the year.

Though it looks like a small decline in terms of percentage, when we are comparing this to the large value of these transactions, it is a considerable Y-o-Y fall. While it is safe to assume that this fall in value might be because of smaller ticket transactions today, UPI is also used at larger convenience stores and for larger online purchases such as ticketing and more.

But when we see it on a Y-o-Y level from January to December, the adoption of UPI has been ever-growing in terms of M-o-M comparison across value and volume of transactions.

Other Digital Payments Methods

NPCI data showed that:

• Aadhaar-enabled Point of Sale (AePS) stood at 225.47 Mn transactions, as against 190.6 Mn transactions in December 2019.
• National Electronic Toll Collection (NETC) recorded 93.02 Mn transactions, a 45% M-o-M jump after mandatory FASTag implementation
• Immediate Payment Service (IMPS) clocked 259.33 Mn transactions worth INR 2.16 Lakh Cr

Going forward, if UPI, with international expansion and growing reach, will get on the track remains to be seen.