UPI Transactions More Than Double To 77 Million In A Month
Average payment drops as UPI transactions double in October.
Mobile fund transfers through the Unified Payments Interface may not remain free for long.
Transactions more than doubled in October to 77 million from 30.8 million in September, data released by the National Payments Corporation of India showed. The total value too jumped about 20 percent over the previous month to Rs 7,057 crore.
The average UPI payment size dropped to Rs 916.5. That compares with Rs 1,717 in September and Rs 3,000 in March. NPCI had launched the interface for low-value payments and fund transfer across banks in April last year. Yet, it makes it unviable for banks that are already considering charging users. HDFC Bank in June informed its customers that they will have to pay for UPI transactions but abandoned the move after the NPCI intervened.
“At some point of time, charges would have to come because it cannot work on subsidy. But we should also appreciate that 77 million as a figure is very small compared to the big market that we have,” AP Hota, former chief executive officer of the NPCI, told BloombergQuint. The government has an ambitious target of 25 billion digital transactions for the full year and UPI and Immediate Payment Service or IMPS must together at least touch 500 million, he said. “They are only around 160-odd million right now.”
NPCI declined to comment on the story.
Hota said the drop in the average payment size can also be attributed to new applications like Google’s Tez. “You will be able to adequately assess the impact in another month or so, when the novelty dies down,” he said.
Google launched Tez in September, joining a crowded market, as part of its strategy to build a billion new users. The push for cashless payments came after the last November’s demonetisation as the resultant cash crunch forced people to use digital transactions.
According to the Android application store, Tez has recorded 5 million downloads. In comparison, other UPI-enabled payments applications such as PhonePe and BHIM saw 10 million each and Chillr was downloaded 1 million times.
UPI brings in a level of ease in transactions, which makes it preferable for customers, according to Naveen Surya, chairman of Payments Council of India. “Customers who were earlier using IMPS for quick transactions now prefer UPI as it has fewer steps and is free of charge.”