Value of UPI transactions decline in November at INR 1.8 trillion: NPCI data

Payment occurring through Unified Payments Interface (UPI) in India continues to rise. According to a monthly official data released by National Payments Corporation of India (NPCI), a government-backed umbrella organisation for all kind of retail payments, stated that  the volume of transactions clocked through UPI stood at 1.2 billion in November, a marginal rise over the previous month, where it recorded a billion transactions for the first time.

Decline in value

However, the value of UPI transactions for November witnessed a small decline at INR 1.8 trillion as against INR 1.9 trillion in October this year. The decrease in value, though marginal, could be due to a slowing economic activity leading to consumers cutting down on discretionary spends. It is essential to mention here that UPI, which allows P2P and P2M(person to merchant) transactions on a real-time basis across multiple bank accounts, is free at present.

“Although the number of transactions has increased, value-wise the numbers are flat since it is being contrasted with the festive spending in October. However, a rise is expected once again with the upcoming New Year and Christmas celebrations,” Mandar Aagashe, founder and vice-chairman of Sarvatra Technologies said.

UPI, launched in 2016, has gained much popularity among users due to the convenience and security factor along with the government’s major push towards making India a less-cash society. However, despite that usage of cash in the system is still high at around 80 per cent.

“A drastic growth (in UPI) will be seen once a large set of the population residing in the rural areas starts using it more frequently. Enhancing awareness among retailers and end consumers will go a long way in bringing in an exponential rise in UPI,” Anand Kumar Bajaj, Managing Director and Chief Executive Officer of PayNearby said.

Meanwhile, the transactions via BHIM, the app launched by NPCI to enable UPI payments, declined by 7 per cent in November at 16.96 million. With the overall value of transactions pegged at INR 58 billion as against INR 63 billion in October, the transactions on BHIM declined even as private players such as Google Pay and Walmart-backed PhonePe continue to contribute majorly to the overall transactions as over 60 per cent and 21 per cent respectively. On the other hand, India’s most popular mobile wallet Paytm enjoys a mere 5 per cent share in the entire UPI ecosystem.

NPCI calls for innovations to drive UPI

In another UPI-related development, NPCI has collaborated with startup incubator CIIE.CO and Bill and Melinda Gates Foundation to enable UPI transactions for feature phone users in the form of a competition, as reported by digital news platform Inc42.com.

Interested startups and innovators can apply for the programme through NPCI’s website. CIIE and NPCI will shortlist the most promising solution for further support. Interestingly, startups, developers or innovators do not need to be registered to apply for the challenge, the report stated adding that the shortlisted start-ups and innovators will have access to NPCI’s  Application Programming Interface (API), which will help them to understand the technical requirements and build the solutions.

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