Money & Banking

Covid effect: UPI transactions up significantly post-lockdown

A J Vinayak Mangaluru | Updated on September 07, 2020

The Covid pandemic seems to have made people focus on contactless payments in their daily life. Though a significant number of people started using contactless payment options such as UPI (Unified Payment Interface) even before the pandemic, its usage has gone up significantly post-lockdown.

Nearly one-third of the total amount transacted on this four-year-old platform came in the last six months (the period following the lockdown).

NPCI (National Payments Corporation of India) launched UPI on August 26, 2016. The total amount transacted on the UPI platform stood at ₹43.45-lakh crore between 2016 and 2020. Of this, ₹14.26-lakh crore was transacted in six months between March and August 2020. This works out to almost one-third (32.82 per cent) of the total amount transacted on this platform during the last four years.

The number of transactions on the UPI platform also increased post-pandemic. Of the total 2,552 croretransactions on the UPI platform between August 2016 and August 2020, nearly 793.40 crore transactions (31.08 per cent) took place between March and August 2020.


Asked about the reasons for this growth, Mahabaleshwara MS, Managing Director and Chief Executive Officer of Karnataka Bank Ltd, told BusinessLine that the urge among people to go in for contactless payment options is one of the important factors for its growth in the post-Covid scenario.

While demonitisation triggered compulsions for alternative channels of payment, the user-friendly characters of UPI platform led to the easy adoption by masses prior to the country witnessing Covid pandemic, he said.

Stating that future banking is driven by digital innovations, he said a lot of contactless initiatives have been happening in the banking space and UPI is one among them. Contactless banking is the perfect remedy for Covid-type of situations as well as further enhancing the efficiency of banking, said Mahabaleshwara.

April performance

Though the lockdown made an impact on UPI transactions in April 2020 with the decline in the number of transactions and amount transacted, these figures were better than the figures of April 2019.

The total number of transactions stood at 99.95 crore in April 2020 against 78.17 crore in the corresponding period of 2019. The amount transacted on the platform increased to ₹1.51-lakh crore in April 2020 against ₹1.42-lakh crore in April 2019.


Small-ticket amounts and the urge for contactless payments seem to have led to this growth.

Karunakar, who delivers milk to more than 75 houses in Mangaluru, said a few customers were paying him through UPI post-demonetisation. However, almost 10 customers switched to ‘Google Pay’ payment mode post-pandemic, he said.

Explaining his experience, Praveen V, the owner of a medical shop in Mangaluru, said that young customers are the ones driving the growth in contactless transactions. His shop used to witness monthly transactions to the tune of around ₹10,000 through UPI mode prior to Covid. In the post-Covid scenario, the amount has increased to almost ₹40,000 a month, he said.

In fact, the average number of daily transactions has also seen a growth in the last six months.

The average daily transactions stood at around 5.22 crore in August and 3.33 crore in April. However, the average daily transactions remained within 3 crore range during March-August 2019.


Suresh Shetty, the owner of a small grocery shop in Mangaluru, said he was not comfortable with cashless transactions, though some customers were demanding cashless payments post-demonetisation.

In the post-lockdown scenario, the demand for contactless payments went up by young customers. Stating that many of these customers prefer avoiding the usage of currency notes post-pandemic, he said one of his customers even made the arrangements for QR code-based UPI transactions at his shop.

Terming this mode of transaction as a new beginning for him in the post-Covid world, he said some of his old customers, who were paying in cash, are also using UPI now.

Published on September 07, 2020

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