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The mobile-only payments ecosystem Unified Payments Interface (UPI) is emerging as a major payment option for Indian users, with transactions worth ₹8.70-lakh crore carried out in 2018-19, a growth of 695 per cent over the previous fiscal.
UPI users transacted around ₹8.70-lakh crore on this platform in 535.34 crore transactions during 2018-19, against ₹1.09-lakh crore in 91.35 crore transactions in 2017-18.
The amount transacted on this platform has also been witnessing rapid growth month after month. It increased to ₹1.33-lakh crore in March 2019 from ₹27,021 crore in April 2018.
The number of monthly transactions stood at 79.95 crore in March 2019, up from around 19 crore in April 2018.
Mahabaleshwara MS, Managing Director and Chief Executive Officer of Karnataka Bank, told BusinessLine that the ease of doing money transfer and the user-friendly nature of the platform are the key reasons for its growth.
He said UPI allows users to link multiple bank accounts with a single app. It also facilitates small-value transactions for a user. There is no need for a user to remember the IFSC code or account number and is available round-the-clock, he said.
There is no need to maintain cash in digital wallets as the fund is debited directly from the bank account.
‘Digital Payments Report’ by Worldline India (WI), wholly-owned by Worldline SA (a payments company in Europe), attributed the success of UPI to its intrinsic values such as mobile-first, cost-effectiveness, inter-operability, and secure and reliable open-source platforms.
It said that e-wallets and fintech companies are leveraging UPI to attract new consumers. Banks are extending their reach to provide an alternative payment service to users.
However, the report said that the acceptance of UPI across categories such as mutual funds, grocery stores, bill payments, shopping, and for IPO payments is the need of the hour.
Deploying UPI QR codes at local merchant outlets will certainly build app stickiness that can gradually make UPI the de-facto mode of online payment , it said. It may be noted here that the number of banks live on the UPI platform increased significantly to 142 at the end of March 2019 from 97 in April 2018.
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