The unified payments interface (UPI)-based transactions reached 9.3 billion in June 2023 from 151 million in January 2018, primarily driven by the growth in Person-to-Merchant (P2M) transactions, a report showed on Tuesday.
In January 2022, P2M transactions accounted for 40.3 per cent of all UPI transactions, compared to 57.5 per cent in June this year and this percentage is likely expected to keep growing, according to Worldline’s ‘India Digital Payments Report for H1 2023.’
The average ticket size for UPI P2M transactions which was Rs 885 in January 2022 has reduced to Rs 653 in June this year, indicating that UPI is now being increasingly used for micro transactions, indicating a further entrenchment of UPI.
“The broad swathes of the country, rural and urban, are embracing digital payments. The allure of digital payments beckons both consumers and merchants alike, evolving it into an indispensable facet,” said Ramesh Narasimhan, CEO-India, Worldline.
Three UPI apps are dominant in terms of volume and value; PhonePe, Google Pay, and Paytm.
In terms of transaction volume, in June 2023, thethree apps accounted for 95.68 per cent of all transactions compared to 94.55 per cent a year before.
A key driver for this growth has been the near-ubiquitous acceptance of UPI for both personal and payment transactions from the user/buyer standpoint as well as a high acceptance by merchants.
Also, there has been greater penetration of UPI in rural India, said the report.
In H1 2023, frequently visited in-store merchant categories such as grocery stores, restaurants, service stations, clothing stores, government services, pharmacies and hospitals accounted for around 65 per cent in terms of volume and nearly 50 per cent of the total transaction value.
Mobile payments, which are transactions done using mobile phone apps, have seen solid growth.
The number of mobile transactions in the first half of 2023 was 52.15 billion compared to 33.55 billion in the first half last year.
Another comparison shows the real growth; between January 2022 and June 2023, the volume was up 77 per cent while the value was up 58 per cent, said the report.