After recording a three-fold year-on-year growth in 2019, the Unified Payments Interface or UPI has kicked off 2020 on a promising note. While UPI replicated its volume of transactions (1.3 billion) in January as compared to the previous month, it registered a 7% growth in the value of transactions to Rs 2,16,241 crore or Rs 2.16 trillion in the first month of the calendar year 2020.
For the first time, UPI has almost matched the value of transactions recorded by IMPS, showcasing the growing use of UPI. The NPCI-owned instant real-time inter-bank electronic funds transfer system has posted 259.53 million transactions worth Rs 2.16 trillion ( Rs 2,16,810.70 crore) in January.
IMPS and NEFT (from December 16 ) handle much of the online payments via internet banking, round the clock.
This latest data from NPCI comes against the backdrop of the decision made by NPCI to remove interchange fees from UPI and Rupay card transactions.
The NPCI’s decision is likely to impact the growth of UPI, which is still reviewing payments service provider (PSP) fee and switching fees for largest market shareholders such as PhonePe and Google Pay.
If NPCI grants a complete waiver, the private players of third-party apps — PhonePe, Paytm and Google Pay — will not earn anything from transactions done via UPI and RuPay debit cards.
A recent report by Razorpay revealed that Google Pay continued its lead in digital transactions with a 59% share while PhonePe and Paytm contributed 26% and 7% respectively.
However, the three players haven’t revealed the breakdown of data for UPI transactions on their platform.
According to the report, UPI has overtaken credit cards as a preferred mode of payment and recorded the highest growth of 885% in the past 24 months across all payment modes.
Apart from P2P (peer-to-peer) payments, UPI was also the preferred choice for P2M (peer-to-merchants) payments during the same period.
While the players mentioned above mainly drive UPI’s growth, the government has set strict rules for newcomers. For instance, WhatsApp’s full-fledged entry in the unified payments ecosystem may take up to six months more for complying with all government norms.
Recently, RIL-owned Jio had started offering UPI payments facility for select users. Entrackr had exclusively reported this development.