The Unified Payments Interface (UPI) channel was the only mode of retail digital payments to register significant growth in transaction volumes in November, with the number of transactions rising 36.5% month-on-month (m-o-m) to 104 million and their value increasing by 37% to Rs 9,640 crore, representative data released by the Reserve Bank of India (RBI) showed. UPI volumes have risen steeply in the last two months with the entry of Google Tez, Google’s payment app, which used cashbacks and other incentives to on-board users, even as Bharat Interface for Money (BHIM) app relinquished its pole position. The entry of Google Tez and increased competition from other applications like Phone Pe seem to have weighed on BHIM’s performance. The value of transactions made through Immediate Payment System (IMPS), in November, grew 4% m-o-m to Rs 78,258 crore, while the volume grew 1.5% to 89.5 million. This clearly points to an expansion of average transaction value, even though the volume growth has been sharply lower month-on-month, when compared to the above 6% growth in October and the near 9% growth in the preceding two months.
Among other modes of retail payments, debit and credit card transactions at point-of-sale (PoS) terminals fell 5.4% m-o-m in volume terms to 242 million. The aggregate value of card transactions fell nearly 10% from the previous month to Rs 47,981 crore. This data is based on card transactions sourced from four banks and the final figure for the entire system is likely to be much higher. Wallets and other prepaid payment instruments (PPIs) issued by eight non-banks clocked Rs 3,140.5 crore, down 4% from October, on 91 million transactions, down 5% from the previous month.Based on this, the average ticket size of a wallet transaction works out to about Rs 345 in November, up from Rs 340 in October.
The decline in volumes and value of transactions through credit & debit cards and wallets may be attributed to the post-festive season slowdown in spending by consumers. A firmer trend, though, will be visible only after data for the next few months becomes available. The November month data, therefore, by itself may not be an indicator of the future trend in digital payments.