The United Payments Interface (UPI) system, a government-owned digital payment mode, recorded 2.8 billion transactions in June- an all-time high. The figure was a 10.6% jump in volume and an 11.56% jump in value compared to May, as per data released by the National Payments Corporation of India (NPCI). UPI had clocked 2.53 billion transactions in May, down from 2.73 billion in March. NPCI is an umbrella organisation for operating retail payments and settlement systems owned under the country’s central bank, the Reserve Bank of India.
According to reports, a surge in UPI payments after the lifting of lockdowns indicates the likelihood of business activities resuming during June. For the April-May months, UPI had seen a 2.5% decline in value terms. Other branches of UPI and modes of digital payments, including Bharat Bill Payment System (BBPS), National Electronic Toll Collection (NETC), Aadhaar-enabled Payment System (AePS), and Immediate Payment Service (IMPS) also showed significant growth for June.
BBPS payments transactions grew by 16% month-on-month at 45.47 million. NETC by 35.3% to 157 million, IMPS by 8% to touch 303.7 million, and AePs rose marginally at 87.5 million for June. The drop in total digital payments during FY21 is attributable to a slump in business activities due to challenges posed by the COVID-19 pandemic, which led to economic contraction for several quarters. However, economic activities are back on track this year with a rebound in GDP, which will increase the payment transactions this financial year, an industry expert explained.
India is among the top countries in mobile commerce adoption, according to a recent study that surveyed the views of 13,000 global shoppers. 54% of the respondents said they would spend more money if they can use digital payment methods. The survey observes that 93% of Indian respondents prefer using digital wallets regularly as compared to their global counterparts’ average of 55%. 94% of Indian shoppers reported that digital wallets have made shopping easier, and the vast majority (98%) have shopped at an online-only retailer in the past 12 months.
The government is working to increase the adoption of cashless payment systems in the country. In May, NPCI partnered with a Turkish global payment solutions company PayCore as a certified partner for RuPay SoftPOS. Millions of merchants now can convert their near field communication-enabled (NFC) smartphones into a POS machine to accept contactless payments through RuPay SoftPOS.
RuPay is NPCI’s multinational financial services and payment service system. RuPay SoftPOS enables merchants to accept payments securely from contactless cards, mobile wallets, and wearables. Under the collaboration, NPCI said it has authorised the SoftPOS solution developed by PayCore for RuPay. This solution can be integrated into bank or aggregator acquiring systems to enable acquiring of RuPay using mobile phones enabled with NFC (near field communication-enabled) capability or add-ons.
As OpenGov Asia had reported, by 2025, digital payments in India could account for 71.7% of the total payments volume, leaving cash and cheques at 28.3%. Last year, the transaction volume share in the country stood at 15.6% and 22.9% for instant payments and other electronic payments, respectively. Paper-based payments had a considerable share of 61.4%. More than 70.3 billion real-time payment transactions were processed globally last year, a surge of 41% compared to the previous year, as the COVID-19 pandemic dramatically accelerated trends away from cash and cheques towards greater reliance on real-time and digital payments.
