Digital payments see good growth in Jul; UPI transactions up 11% to 1.49 bnAugust 1, 2020
After recording the highest transactions ever in June since its inception, Unified Payments Interface (UPI) has touched a new high in July by recording an 11 per cent growth over the previous month. Transactions in July reached 1.49 billion compared to 1.34 billion in June and 1.23 billion in May, indicative of the fact that more and more people are embracing digital modes of payment over cash. In value terms, UPI recorded transactions worth Rs 2.9 trillion in July, up 11 per cent.
Experts have suggested that because of the virus, a lot of cash users are wary of using currency notes. At checkout points, UPI is becoming the default payment option. It is not only attracting cash users, but card users as well. The UPI numbers will keep rising because there is a fundamental shift in consumer behavior.
While there was a blip in the transactions in April due to the nation-wide lockdown, digital payment transactions soon recovered as the nation opened up after the rigorous lockdown and has almost reached pre-covid levels.
Immediate Payment Service (IMPS) clocked a transaction count of 222.1 million in July, up 11.7 per cent from 198.91 million transaction count in June. In value terms, IMPS registered 7.37 per cent growth to Rs 2.25 trillion in July compared to Rs 2.06 trillion in June. Although, on the basis of transaction count, IMPS has not touched pre-covid levels, as the month of February had witnessed 248 million transactions on IMPS. But in value terms, IMPS platform has crossed the pre-covid mark.
As far as Bharat Bill Payment Services (BBPS) is concerned, transaction count was up 14 per cent to 20.16 million in July from 17.64 million. BBPS has crossed the pre-covid levels, indicating that consumers are moving to e-payments. In value terms, BBPS registered 24.8 per cent growth to Rs 3,707.44 crore compared to 2,969.66 crore in June.
While the month of April saw Fastag transactions decline due to less vehicles on the road, with the opening up of the nation post the lockdown, Fastag transactions have also risen gradually. In July, Fastag transactions were up 5.7 per cent to 86.62 million from 81.92 million in June. Transaction value of Fastag grew 7.33 per cent to Rs 1,623.30 crore in July from Rs 1,511.93 crore in June.
Payments through digital modes are expected to jump to 1.5 billion transactions, worth Rs 15 trillion a day in five years, the Reserve Bank of India (RBI) has estimated. Currently, the daily transactions average at about 100 million for a volume of Rs 5 trillion. Just before the Covid-19 outbreak, the daily transactions were averaging around 125 million a day, which is more than five times the volume digital transactions witnessed in 2016 June.
A report by PWC & Payments Council of India (PCI) has estimated that India will contribute 2.2 per cent to the world’s digital payments market by 2023, while the value of such transactions is expected to reach $12.4 trillion globally by 2025.