After two months of aggressive growth, the unified payment interface (UPI) transaction growth slowed down marginally in August, according to latest data shared by the National Payments Corporation of India (NPCI).
NPCI reported 3.5 Bn transactions worth INR 6.39 Lakh Cr in August 2021, growing 9.5% by volume and 5.4% by value over the previous month.
Though a spike has been reported, in comparison to the transaction value growth seen in the last two months, use of UPI appears to have taken a dip.
In June and July, transaction volume grew by 10% and 15%, respectively, on a month-on-month basis while transaction value had grown by 11% and 10%, respectively.
The slowdown in usage could be attributed to the fact that in June and July, businesses were just returning to normal after a disastrous second Covid wave and customers were also trying to stick to digital “no-contact” modes of payment. This could have slowed down as the economy returns to normal.
In June 2021, UPI crossed 2.8 Bn transactions worth INR 5.47 Lakh Cr and in July, it recorded 3.2 Bn transactions worth INR 6.06 Lakh Cr, up 10.8% month-on-month.
Paytm Stays At Top In Transaction Volume
NPCI data shows that PSO platforms like PhonePe and Google Pay have witnessed a marginal dip in transaction volume share in July. PhonePe’s transaction volume share dipped from 45.73% to 47% and Google Pay’s transaction volume dropped to 35.2% from 35.3%.
Meanwhile, Paytm’s transaction volume spiked by 18% during July in comparison to PhonePe and Google Pay, which grew at 15% each. Highest transaction volume among UPI apps was of Kunal Shah’s fintech company CRED, with 23% growth month-on-month. In fact, CRED took up 1.34% of market share of UPI transactions.
Started in 2016, UPI has had a tumultuous acceptance in the Indian market. It witnessed its biggest dip in April last year, wherein transaction volume dipped to 990 Mn and transaction value dropped to INR 1.51 L Cr. This drop was due to covid lockdowns and restriction on travel, dining out, ecommerce and offline transactions.
After ease of restrictions, UPI transactions surpassed the 2 Bn mark and went on the path of recovery in October 2020 — quite similar to the trend in June and July this year.
Not just UPI, the Reserve Bank of India (RBI) monitors the growth in digital transactions with its digital payments index DPI). DPI was created in 2018 to monitor the extent of digital payments growth in the country.
In March 2021, the index grew to 270.59 from 207.84 in March last year.