UPI Transaction Value Jumps 6% MoM In May As Volume Inches Closer To 10 Bn Mark

The Unified Payments Interface (UPI) recovered the momentum it lost in April 2023, recording transactions worth INR 14.89 Lakh Cr in May, a 5.83% month-on-month (MoM) growth. 

The number of UPI transactions also recorded a 5.81% increase in the month ended May 31, 2023, rising to 941.5 Cr from 889.8 Cr in April and inching closer to the 10 Bn mark. 

On a year-on-year basis, the transaction value rose 43.03% in May, while the transaction count increased 58.5%, according to the National Payments Corporation of India (NPCI) data.

The number of banks on the UPI network witnessed a record-breaking jump in May 2023, going from 414 banks in April 2023 to 447 banks in May. For context, the UPI network added 33 new banks in May 2023 as against 32 banks added between November 1, 2022, and April 30, 2023.

The NPCI also released the app-wise distribution of UPI transactions. PhonePe, Paytm and Google Pay continued their dominance in terms of digital transactions, together processing 911.6 Cr transactions worth INR 14.19 Lakh Cr. The three apps together held nearly 95% share in the UPI market in India during May 2023.

In terms of transaction types, peer-to-peer (P2P) payments accounted for 76.89% of all payments by value. Peer-to-merchant (P2M) payments accounted for the remaining 23.11% of UPI transactions in May.

Further, transactions above a ticket size of INR 2,000 or more dominated both P2P and P2M transactions during the last month. 

In May 2023, nearly two-thirds of the total P2M transaction value was in big-ticket transactions, while the same ratio was 87% for P2P transactions.

However, P2M transactions outweighed P2P payments in terms of the transaction count. While the former accounted for 42.96%, the latter accounted for 57.03% of all UPI transactions during May.

The data also shed light on category-wise transactions. While groceries, supermarkets, restaurants and digital goods were high transacting categories, utilities, online marketplaces and bars were tagged under medium transacting categories.

It is prudent to mention that the NPCI has set an ambitious target of achieving 1 Bn transactions a day in the next five years. A typical day in May 2023 saw about 303.72 Mn transactions, more than 30% of the intended goal.

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