Unified Payments Interface or UPI is likely to set a new record in November as it has already crossed 1.1 billion transactions in the first 15 days of the month, RBI’s settlement data of select payment systems shows.
UPI has processed 1,125 million or 1.12 billion transactions worth Rs 206,517 crore or 2.06 trillion in the first half of November or 15 days. In comparison, the NPCI-owned digital payments system had registered 1,013 million or 1 billion transactions amounting to Rs 191,986.9 crore or Rs 1.91 trillion during the first 15 days of October.
If the trend continues, UPI is likely to record around 2.25 to 2.3 billion transactions in November.
Experts tracking the space have been anticipating that October-November would be a conducive period for e-commerce players to push sales and bolster UPI for a new landmark. Besides consumption in top tier cities, adoption of UPI in rural parts of India has also helped its growth.
In an earlier interaction with Entrackr, Anand Kumar Bajaj, MD & CEO of PayNearby, a fintech startup which focuses on Aadhaar-based banking services, domestic remittances, and bill and card payments in tier I, II and rural towns in India, was upbeat about the growth of UPI and digital payments.
“Rural consumption has seen greater recovery as compared to urban regions and with the advent of smartphones and mobile-based payments, there is likely to be an even greater spurt in the upcoming month. Agent banking or assisted banking, which is popular in semi-rural and rural areas, is likely to help boost digital payments through small-ticket purchases,” said Bajaj.
Earlier this month WhatsApp was also allowed to go live on UPI in the multi-bank model. According to NPCI, WhatsApp Pay can expand its user base in a graded manner starting with a maximum registered user base of 20 million in UPI. The entry of WhatsApp in the already crowded UPI ecosystem could be a reason behind the spurt in the number of transactions in November.
While UPI’s market share is mainly driven by Google Pay and PhonePe, which control close to 80% of total volume, WhatsApp can play a crucial role and change the current position of leading players. As of October, PhonePe had the largest market share of 40.3% followed by Google Pay with 39.5%.
To address the risks and protect the UPI ecosystem, NPCI had also announced that it would put a cap of 30% of the total volume of transactions processed in UPI for all Third-Party App Providers (TPAPs). The new rule formulated by NPCI will be applicable from January 1, 2021.