Even as India has witnessed significant growth in cashless transactions in the past few years, the country is also seeing people prefer mobile transactions, especially UPI, rather than debit cards. According to the latest RBI data, UPI transactions surged 428 per cent to Rs 15.33 lakh crore since July 2020 till now, while debit card spending rose just about 12 per cent.
According to the data, in July 2020, the total debit card spending stood at Rs 2.81 lakh crore, as compared to Rs 3.15 lakh crore in July 2023, reflecting a growth of 11.96 per cent. UPI spends have seen a whopping growth of 428 per cent, zooming from Rs 2.90 lakh crore to Rs 15.33 lakh crore during the same period, the data revealed.
UPI is a convenient mode of payment and almost everyone in India uses it these days.
The increased usage of UPI for micro transactions due to the convenience has caused a serious dent in the debit card usage with customer preference undergoing a shift,” said Sunil Rongala, senior vice-president, head of Strategy, Innovation & Analytics, Worldline India, according to a Business Standard report.
In July 2020, banks issued 85.23 crore debit cards. The number has now increased to 97.07 crore, indicative of the flat growth trajectory.
“A multi-fold increase seen in UPI transactions in the past decade is driven primarily by an increased user base due to higher penetration seen towards rural India. This was also supported by the expanding account base in terms of linkage with savings accounts, Rupay credit cards and current accounts, no additional cost on transfers, hassle-free transactions and the increased internet and smartphone penetration,” Aniket Dani, director of Research, Crisil Market Intelligence and Analytics, according to the BS report.
Worldline India’s Rongala said that over time, person-to-merchant transactions will drive UPI transactions growth and it will be no surprise if UPI transactions hit 20 billion a month in 18-24 months.
In August this year, UPI transactions hit Rs 1,000 crore for the first time in a month. Monthly UPI payments in value terms are now clocking at more than Rs 15 lakh crore.
Last week, the NPCI also launched a slew of new payment options on popular payments platform UPI, including conversational transactions. The latest offerings — Credit Line on UPI, UPI LITE X, and Tap & Pay, Hello! UPI and Conversational Bill Payments — are aimed at creating an inclusive, resilient, and sustainable digital payments ecosystem and will help UPI achieve the target of 100 billion transactions per month, NPCI said.
Hello! UPI, will help users make voice-enabled UPI payments via apps, telecom calls, and IoT devices in Hindi and English.
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