The growth chart of UPI transactions continues to become a threat to other digital payment modes including wallet companies and plastic money enabler Visa and Mastercard. According to a Reserve Bank of India (RBI) data, the transactions through UPI reached almost half the value of debit and credit cards swiped at stores last month.
Since its inception, the unified payment platform has been witnessing a massive month-on-month growth. In the past 8 months, only January had recorded a single digit growth as far as transaction volume is concerned.
The credit for government-promoted initiative goes to several banks and digital payments platform such as Paytm, Google’s Tez, BHIM which run on UPI. Besides, cab-hailing major Ola, Big Bazaar, Amazon India and IRCTC also integrated UPI-enabled payment option on their platforms.
In the coming days, the UPI volume is expected to grow exponentially with the mass rollout of WhatsApp UPI which has a consistent 250 million users. The Facebook-owned company has already been making noise time and again for alleged circumvention of regulations.
During last month, the debit/credit card transaction stood at around 466 billion rupees in comparison to UPI which hovers around 190 billion rupees during the same period. The number of UPI transactions has surged a staggering 57,000X since November 2016 while debit and credit cards collectively recorded 20 percent rise, reflects the RBI data.
Samsung Pay and Google with 80-100 and 300 million userbase respectively will also contribute to the fledgling payment option. Meanwhile, India’s digital payments ecosystem had secured the top spot on global digital payment front for innovation and customer value.
Currently, India’s payments market is worth less than $200 billion, and it is expected to reach to $1 trillion over the next five years. The growth is still far behind China’s $27 trillion payment market.
The only hindrance to UPI and digital payments growth is the dominance of cash in the country, which accounts for some 70 per cent of the total transactions by value.
While digital payment modes are gaining a quick ground in India, still it’s far away from the evolved and matured payment ecosystems like China. China transitioned to digital payment has largely been triggered by smartphones and strong ecosystem created by WeChat, AliPay, and others. With 300 million smartphones user base, a fraction of experts and analysts believe that India will follow the same pattern.
The news was first reported by Bloomberg.