In the six months to September 2020, payments through UPI-based apps exceeded 50% of total retail digital payment volume, becoming the most popular transaction method for cashless transactions, Moody’s said in a report. recent report.
The value of transactions through the Unified Payment Interface (UPI) increased 19% month over month (mom) to Rs 5.05 lakh crore. Volumes increased by an amount equivalent to 2.73 billion, according to data released by the National Payments Corporation of India (NPCI) on Twitter.
UPI volume growth has been driven over the past year by the development of QR-based acceptance points across the country. FE reported last month that the value of peer-to-merchant (P2M) transactions through UPI exceeded that of transactions made using credit or debit cards at point-of-sale (PoS). These P2M transactions benefited from the zero merchant discount rate (MDR) regime. Innovations in trader alert systems have also done a lot to boost trades by traders on the channel. In the six months to September 2020, payments through UPI-based apps exceeded 50% of total retail digital payment volume, becoming the most popular transaction method for cashless transactions, Moody’s said in a report. recent report.
In the early years of its growth, UPI thrived largely through peer-to-peer (P2P) payments, with the P2M coin accounting for 20-30%. That equation may have changed with the demands of social distancing leading more people to switch to digital payments.
The next phase of UPI transaction growth could be driven by innovations that are expected to be introduced by new umbrella entity licensees (NUEs). NPCI itself is working on the development of a platform for multifunction phones which, too, could play a role in the growth.
In a recent memo, Moody’s said there is still ample room for the growth of digital transactions in the Indian context, under the leadership of UPI. The Reserve Bank of India (RBI) estimates that the number of digital transactions will increase to 87 billion in 2021, up from around 40 billion in 2020. a growing middle-class population and a well-established digital identification system, ”Moody’s said , adding that only the State Bank of India (SBI) and a few large private banks have the resources to effectively take advantage of growing consumer and business preferences for digital services. .
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