The total transaction volumes for the month of January 2019 over the government-backed Unified Payment Interface (UPI) saw an hike of 8.47%, to 672.75 Mn as compared to 620.17 Mn in December 2018. The total worth of UPI transactions in January 2019 was INR 109K Cr. However, the number of registered banks on UPI remained constant at 129.
In January 2018, the total UPI transactions were at 151.833 Mn , which means January 2019 saw 4.4 times increase in transaction over the last year.
Since its inception, UPI has received strong support from the government. Last year finance minister, Arun Jaitley had said in a facebook post “Today Visa and Mastercard are losing market share in India to indigenously developed payment system of UPI and RUPAY Card, whose share have reached 65 percent of the payments done through debit and credit cards.” Also, Prime Minister Narendra Modi at East Asia Summit in Singapore had pushed for fintech saying, “Every digital payment saves time.”
Meanwhile the government-backed UPI app BHIM dropped by a significant 18%, according to data released by National Payments Corporation of India (NPCI).
NPCI is an umbrella organisation setup by Reserve Bank of India (RBI) and Indian Banks Association (IBA) for all retail payments in India.
BHIM analytics recorded 13.98 Mn total transaction volume in January 2019, down from 17.06 Mn transactions in December 2018. The number of live banks on BHIM has stayed at 128 since October 2018. BHIM transaction volume was 9.57 Mn in the same month last year (January 2018).
According to a NITI Ayog booklet on Digital Payments (2018 edition), India’s digital payments industry is estimated to grow to $1 Tn by 2023. UPI and IMPS segment registered a spectacular growth in transactions volume between 2017-18. UPI, despite being a fairly new product in payment segment witnessed high adoption rate among merchants and consumer alike.
The NPCI launched Version 2.0 of UPI in July 2018, which included features such as collect payment requests generation along with invoice attachment, a one-time mandate with block functionality and others.
Since demonetisation in November 2016, when government removed INR 1000 and INR 500 currency notes, India’s monthly digital transactions volume had increased three times to 2.44 Bn in November 2018 from 736.7 Mn transactions in October 2016. Demonetisation led to a serious crunch of liquid capital and forced citizens to opt digital payments. This also resulted in increased government efforts to develop digital transaction solutions such as BHIM and UPI.
Paytm, another competitor in UPI, recorded 137 Mn UPI transactions in September. In November 2018, Paytm claimed a 600% growth in UPI transactions in six months.