A report on Thursday (February 27) said that Unified Payments Interface (UPI) remained the most preferred mode of payment in terms of volume followed by debit cards, immediate payment services (IMPS) and credit cards.
India Digital Payments Report 2019 by Worldline said that UPI recorded a transaction volume of 10.8 Bn in 2019, a year-over-year increase of 188%. “UPI is perhaps the fastest product to hit 1 Bn transactions-a-month in 2019 since its inception in August 2016,” it added.
The report notes that digital payment products are being primarily utilised for person-to-person (P2P) transactions than person-to-merchants (P2M) transactions. In terms of value, UPI facilitated transactions worth INR 18.36 Tn, up 214% from 2018.
Some of the key factors that powered UPI’s transactions growth in 2019 are:
- Adoption of UPI 2.0 features by banks
- Enabling payments for IPO applications
- Facilitating Foreign Inward Remittance service
- Supporting donations for several relief programs
- Numerous cashbacks and discounts offered by banks and non-bank players
Another successful digital payment medium was IMPS. It recorded a 55% Y-o-Y increase by facilitating about 2.3 Bn transactions in volume. It clocked INR 21.8 Tn in terms of value, up 41% from 2018.
“In terms of value, IMPS attained the ‘numero uno’ position throughout the year followed by UPI. Value of debit and credit cards remained nearly the same throughout the year,” said the report.
In 2019, UPI, IMPS, debit cards, and credit cards together recorded a combined transactions volume of over 20 Tn and a combined value of over INR 54 Tn. For the research, Worldline analysed transactions available in public databases as well as transactions processed by the company in 2019.
The country has witnessed a full range of Aadhaar enabled banking services through AePS over the past few years. In 2019, the total volume of Aadhaar Enabled Payment System (AePS) transactions stood at 2.3 Bn, achieving Y-o-Y growth of 12%. The value of transactions achieved a milestone of INR 1 Tn in 2019 withY-o-Y growth of 31%.
A report by the Boston Consulting Group recently showed that UPI will dominate the payments space with 59% payment transactions by 2024-25. This would be followed by mobile and internet-based payments, which will constitute a fifth of the total number of cash and non-cash transactions.