It is now well established that the UPI (Unified Payment Interface), which started in 2016, was the main driver behind India’s digital economy. And with each passing day, the numbers he presents are impressive.
In the first quarter of 2022, UPI recorded over 14.55 billion transactions in volume and Rs 26.19 lakh crore in terms of value. Its transaction volume and value has nearly doubled since last year, recording around 99% increase in volume and over 90% increase in value compared to Q1 2021.
These figures emerged in a Worldline report titled ‘India Digital Payments Report’ Q1 2022. It analyzed transactions available in public databases as well as transactions processed by them in Q1 (January to March 2022).
UPI P2M transactions have emerged as the preferred means of payment among consumers, with a market share of 64% by volume and 50% by value.
Altogether, in the first quarter of 2022, 9.36 billion transactions worth Rs 10.25 lakh crore were processed through payment modes such as debit and credit cards, prepaid payment instruments such as mobile wallets and cards. prepaid and P2M UPI (Person to Merchant).
The top states and cities with the highest number of digital transactions at physical touchpoints in Q1 2022 are (States): 1. Maharashtra 2. Tamil Nadu 3. Karnataka 4. Andhra Pradesh 5. Kerala 6. Gujarat 7. Delhi 8. Uttar Pradesh 9. Telangana 10. West Bengal
Cities: 1. Hyderabad 2. Bengaluru 3. Chennai 4. Mumbai 5. Pune 6. Delhi 7. Calcutta 8. Coimbatore 9. Ahmedabad 10. Vadodara.
But credit and debit cards aren’t dead yet.
While UPI transactions are galloping, the feeling that it predicted the demise of credit and debit card use seems greatly exaggerated.
The report said that credit cards accounted for 7% of transactions but 26% of value, which suggests that customers still prefer to use their credit cards for high-value transactions. Debit cards account for 10% of transactions but only 18% by value – volume and volume have shrunk from previous years and likely due to the rise in UPI.
The main sending banks were State Bank of India, HDFC Bank, Bank of Baroda, Union Bank and Paytm Payments Bank, while the main beneficiary banks were Paytm Payments Bank, State Bank of India, YES Bank, Axis Bank and ICICI Bank.
The total number of credit and debit cards in circulation at the end of the first quarter of 2022 was 991.28 million. While the number of outstanding credit cards increased by 19% from 62.04 million in March 2021 to 73.6 million in March 2022, outstanding debit cards increased by just 2% from 898.20 million to 917.66 million during the same period. In fact, during the second quarter of 2022, around 23 million debit cards were withdrawn from circulation, which could be a correction in the numbers reported by banks or the closure of inactive accounts.
As of March 2022, the main credit card issuing banks were HDFC Bank, SBI, ICICI Bank, Axis Bank and RBL Bank, while the main debit card issuing banks were SBI, BOB, Union Bank, Canara Bank and Punjab National Bank.
The Worldline report said customers are becoming more comfortable shopping online via credit cards for large ticket transactions, while debit cards are used more often for small ticket purchases at points of sale. of physical contact. Value-added services like EMI, BNPL are allowing customers to opt for high value products and services using their cards.
PhonePe, Google Pay, Paytm dominate
In Q1 2022, the top UPI apps in terms of volume were PhonePe, Google Pay, Paytm Payments Bank App, Amazon Pay, Axis banks App, while the top PSP UPI Players were YES Bank, Axis Bank, State Bank of India, HDFC Bank and Paytm Payment Bank. Among top UPI apps, Phone Pe, Google Pay and Paytm accounted for 94.8% of UPI transaction volume and 93% of UPI transaction value in March 2022. Average ticket size (ATS) for UPI P2P transactions was INR 2455 and INR 860 for P2M transactions as of March 2022.
“With UPI adoption by merchants growing rapidly, P2M UPI ATS is witnessing steady upward growth while ATS for P2P transactions is decreasing, but this is an effect of transaction volume as well as a shift to P2M transactions. P2M transactions recorded a 24% increase in Q1 2022 compared to Q1 2021,” the report said.
In Q1 2022, of the total UPI volume, 56% of transactions were P2P, while 44% were P2M; in terms of value, P2M transactions generally contributed to around 19% of UPI transactions.
In Q1 2022, frequently visited physical merchant categories such as grocery stores, restaurants, clothing and apparel, pharmacy and medicine, hotels, jewelry retail, specialty retail, home appliance and department stores together accounted for more than 60% in terms of volume and around 58% in terms of value. In the online space, e-commerce (purchasing goods and services), gaming, utilities and financial services contributed to more than 85% of transactions in terms of volume and 47% in terms of value.