Going against all the odds, UPI has again testified the quick adoption of digital payments in India. After a declination of 4.5 per cent in volume of transaction in July, the NPCI-owned payments channel has bounced back in August with a 32 per cent spike in the volume of transaction.
According to the latest NPCI data, the volume of transaction for August was 312.02 million. In the previous month, UPI transaction witnessed 235.65 million transaction, which was the second ever fall in terms of volume since its inception.
As far as the value of transaction is concerned, UPI also managed to maintain its growth to Rs 54,212.26 crore, an 18 per cent increase as compared to the previous month.
The instant payments service IMPS also witnessed an increase of 4.8 per cent in volume of transaction in the last month. It recorded 135.58 million as the volume of transaction worth Rs 1,23,733.51 crore.
The spike in the volume of transaction comes as a surprise for the UPI ecosystem as NPCI had banned payments transfer within same account or UPI ID (where the payer and the payee account are actually the same) from August 1.
Meanwhile, UPI has also upgraded its previous version to become UPI 2.0. Now it comes with various new and important features such as ‘overdraft facility’, ‘block payment’ and ‘signed intent and QR.’
After the NPCI diktat of banning fake or artificial transactions in order to get cashbacks, it was expected that UPI-enabled payments platforms such as Paytm, PhonePe, Google Tez (now Google Pay) and others would witness a downfall in the number of transaction.
While the break up of UPI transaction across apps for August is yet to come, Flipkart-owned PhonePe alone facilitated over 40 per cent transactions (94 million) in the previous month. It was the highest share by UPI-enabled payments platform where Paytm has been leading the show.
Google Tez, which recently rechristened as Google Pay also emerged as the third player in the UPI ecosystem. Till July, Google Tez accounted for about 22 per cent of the total volume on UPI, clocking 54 million transactions.
Government-owned BHIM has remained flat in August with 16.5 million transaction worth Rs 6,872.57 crore. In the previous month, it recorded 16.46 million transaction worth Rs 6,692.66 crore.
The growth of UPI will highly depend upon small merchants coming to the platform for day to day transaction. While Paytm, PhonePe had already expanded their footprint in the merchant market, BHIM and Google Pay are throwing the same card to gather more users on their platform.
With WhatsApp Pay is yet to open for masses and Amazon own UPI platform is waiting for government nod, the peer-to-peer payments service would be the next revolution in India.