Unified Payments Interface (UPI), India’s flagship digital payment platform, has witnessed a remarkable growth of 118% in volume and 106% in value at semi-urban and rural stores in the country in 2022, according to a report by branchless banking and digital network PayNearby.
The report, based on data from over 1.2 million retail outlets across 17,000 pin codes, revealed that UPI transactions accounted for 38% of the total digital payments at these stores, followed by Aadhaar Enabled Payment System (AePS) at 34%, and debit cards at 28%.
The report also highlighted that UPI transactions saw a 650% jump at the semi-urban and rural stores in India, compared to 2021. This indicates a behavioural shift in the consumers in these regions, with more citizens adopting assisted digital means for their banking and lifestyle requirements and getting incorporated into the formal economy, the report said.
The report further stated that there was a growth of 25% and 14% in value and volume, respectively, in assisted financial transactions across semi-urban and rural retail counters in the country in 2022. The average ticket size of UPI transactions at these stores was Rs 1,800, while that of AePS was Rs 2,500, and debit cards was Rs 1,500.
The report attributed the surge in UPI transactions to the increased awareness, convenience, and security offered by the platform, as well as the incentives and cashbacks provided by various UPI apps. The report also noted that UPI transactions were more popular among the younger and tech-savvy consumers, while AePS transactions were preferred by the older and low-income consumers.
UPI, launched in 2016 by the National Payments Corporation of India (NPCI), is a real-time payment system that allows users to transfer money between bank accounts using a virtual payment address (VPA) or a mobile number. UPI has emerged as one of the most widely used digital payment modes in India, with over 300 million registered users and over 20 million merchants.
According to the latest data from NPCI, UPI transactions hit a record 782 crore in December 2022, totalling Rs 12.9 lakh crore. In calendar 2022, the UPI platform saw 7,404 crore transactions for Rs 125 lakh crore. UPI transactions by volume rose 85% on year, while it was up nearly 68% by value as compared to last year.
UPI transactions are expected to grow further in 2023, as the platform expands its reach and features, and as more users and merchants adopt digital payments in the wake of the Covid-19 pandemic and the government’s push for a less-cash economy.
