UPI’s May volume rises 24% as Govt removes restriction on e-com

Source: IBS Intelligence 2020-06-02

Despite a lockdown, India’s digital payments through Unified Payments Interface (UPI) has registered a 24 % growth at 1.23 billion transactions in May compared to the previous month. According to the data provided by National Payments Corporation of India (NPCI), an umbrella body of digital payments, the value of transactions on UPI rose 44% at INR 2,183 billion in May as against April.

According to experts, the volume and value of UPI transactions grew as people used the payment mode to order a more substantial amount of essentials after the Indian government allowed e-commerce companies to start delivering products. The services of eCommerce companies remained disrupted from mid of March to the end of April. The government had also allowed certain stores selling electronics and home appliances, which also contributed to a rise in transactions through UPI.

In February, UPI processed 1.32 billion transactions worth INR 2,225 billion, highest ever for the real-time money transfer interface. Among the apps offering UPI payments, Google Pay recorded 430 million P2P UPI transactions out of total 999.57 million in April, according to a report by Entrackr. PhonePe and Paytm registered over 365 million and 125 million transactions, respectively. In the P2M segment, PhonePe processed 180 million in volume, followed by Google Pay and Paytm at their respective volume of transactions at 164 million and 69 million.

Experts also said that the overall share of digital payments has increased during the pandemic as people avoided cash transactions to prevent the spread of the virus. Besides, the government’s Direct Benefit Transfers to farmers and underprivileged in rural areas through the Aadhaar-enabled payment system (AePS) also contributed to the rise in digital transactions. AePS witnessed a massive 25 % surge in May, as per NPCI.

“In the ongoing national lockdown, relief cash withdrawals are the lifeline for migrants, daily wage, and other informal sector workers suffering severe setbacks to their livelihoods. As a result, there has been a pivot to reliance on AePS. Our Digital Pradhans at PayNearby has had the privilege to serve over 1.4 crore people through our AePS platform in May alone, having disbursed over INR 30 billion. A spike of 23% in AePS transactions showcases a behavioral change in the way people conduct transactions, and is sure to accelerate the rate of digital adoption in the country,” said Anand Bajaj, Founder of PayNearBy.

Besides NPCI’s flagship app BHIM also has recorded an increase in transaction volume at INR 2180 billion in May.

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UPI’s May volume rises 24% as Govt removes restriction on e-com

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