UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions

UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions

SUMMARY

UPI recorded 452.7 Cr transactions in February 2022 with a cumulative value of INR 8.26 Lakh Cr

While the total number of banks live on UPI has increased to 304, this did not have a great impact on the transaction value or volumes

Even in January, the UPI transaction volumes and value had only increased by 1% from December 2021

India’s flagship digital payments mode, unified payments interface or UPI, recorded 452.7 Cr transactions in February 2022, as per official data released by the National Payments Corporation of India (NPCI), down slightly from the performance in January 2022. The value of transactions also fell to INR 8.26 Lakh Cr in February, as compared to INR 8.31 Lakh Cr in January, across 461 Cr deals.

While the total number of banks live on UPI has increased to 304, compared to 297 in January, this did not have a great impact on the transaction value or volumes. Even in January, the UPI transaction volumes had only increased by 1% from December 2021, with a similar increase in the transaction value as well.

In 2021, UPI enabled 39 Bn financial transactions amounting to business worth $940 Bn, which is equivalent to around 31% of India’s gross domestic product.  While so far the service is available for online payments through smartphones and websites, NPCI is planning to add feature phone support for UPI, which could be more critical to its growth story as well as financial inclusion goals.

It will be interesting to see how the NPCI tracks data for UPI usage outside India, given that Nepal became the first country outside India to adopt the payments platform. The Nepal government and Nepal Rastra Bank are working with the NPCI to bring UPI to Nepalese citizens.

UPI Transaction Cap On The Horizon

While February 2022’s app-wise figures will be released later this month, in January 2022, PhonePe led the UPI app market with INR 4.05 Lakh Cr transactions. Google Pay maintained its second place lead but its transaction value fell to INR 2.98 Lakh Cr in January. Following these were Paytm (INR 85,125 Cr in transactions), Amazon Pay (INR 6,729 Cr in transactions) and WhatsApp Payments (INR 205 Cr in transactions), as seen below.

PhonePe Maintains Lead In UPI With 49% Market Share In Jan 2022, WhatsApp At 0.02%

PhonePe is clearly in the lead when it comes to UPI apps, with a 46% market share in the volume of transactions processed and a transaction volume share of 48.7%. Last month, Google Pay’s market share, only second in line after PhonePe, fell from 37.5% to 34.4%. All UPI apps have to reduce their share of overall transactions to under 30% by the end of 2023, as per NPCI regulations.

What About Zero MDR?

During her Union Budget 2022 address, finance minister Nirmala Sitharaman did propose to renew the INR 1,500 Cr allocation for boosting adoption of digital payments in India, but the biggest question that remains unanswered is the lack of MDR in UPI payments.

The payments ecosystem has been calling for the abolishing of the zero MDR regime for UPI and RuPay transactions, which greatly limit the monetisation potential of UPI-based businesses, particularly for individual-to-merchant transactions. MDR is the fee that a merchant pays to a bank to facilitate a digital transaction and is currently capped at 0.9% of the transaction value for payment channels other than credit cards — for the latter, MDR is market-determined.

The Payments Council of India (PCI), the largest industry body for the digital payments ecosystem, said the industry expects a loss of INR 5,500 Cr due to zero MDR, so while the government has taken steps to boost adoption of digital payments, the question of losses for UPI apps is yet to be answered.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
UNLOCK 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
UNLOCK 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions-Inc42 Media
UPI Sees Minor Decline In February 2022: INR 8.26 Lakh Cr In Value Across 452 Cr Transactions-Inc42 Media
You’re in Good company