The value of transactions made through the Unified Payments Interface (UPI) has risen more than two-and-a-half times during the first 16 days of December over the value in from November. The aggregate value of such transactions for the current month is Rs 249.36 crore compared with a value of Rs 90.52 crore for November, according to data released by the Reserve Bank of India (RBI).
Since December 2, the central bank has been releasing data related to electronic payments on a daily basis, with a day’s lag.
In terms of volume, UPI transactions saw a near-three-fold increase to 8 lakh transactions between December 1 and December 16 over the 2.9 lakh transactions reported in November.
One of the reasons for the surge in transactions was the sudden withdrawal of legal tender on currency notes of R500 and R1,000 on November 8. The recall of 86% of bank notes in circulation resulted in a cash crunch, which forced a number of people to make transactions using digital channels, including UPI.
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The other reason behind higher transactions was large lenders State Bank of India (SBI) and HDFC Bank joining the UPI platform in November. The two, along with peers such as Bank of Baroda, Allahabad Bank and IDFC Bank, were late to join the platform amid concerns around the lack of a mechanism for resolving disputes in case of failed transactions. There were also worries around the security of the system. After representations from banks, the National Payments Corporation of India (NPCI) had taken care of the matter, bankers said.
“That (dispute resolution) was one of the reasons. The idea was that if the service is being launched, it should work for the customer. With USSD (unstructured supplementary service data) also, one of the issues was that there were hardly any dispute resolution mechanisms. If you (the consumer) have to run around, you will not like even a good product,” said an official with a large public-sector bank.
Transactions made through the USSD channel, an SMS-driven payments service, jumped nearly four times to R27,504.2 from the aggregate amount for the whole of November. The service is meant for those using basic cellphones, also known as feature phones, and lacking access to the internet.