Transactions on the Unified Payment Interface (UPI) rose 52% year-on-year in terms of value and 40% y-o-y in terms of value in the first half of 2024, a report showed on Thursday.
According to the India Digital Payments report – H1 2024 by Worldline, the growth in UPI transactions was driven by a substantial rise in person-to-merchant (P2M) transactions. The P2M transactions, in terms of volume, grew to Rs 48.94 billion during January-June from Rs 29.15 billion in the same period a year ago. Meanwhile, in terms of value, they registered an increase of 62%, according to the report.
Ramesh Narasimhan, CEO, Worldline India, said: “UPI remains the dominant player, with over 78 billion transactions in the first half of 2024 alone, which is a 52% increase in volume compared to H1 2023. This significant rise in UPI transactions, particularly in the P2M segment, further cements its position as the preferred method for micro-transactions, demonstrating long-term sustainability.”
UPI continues to dominate as a preferred method of accepting payments, and the dominance is expected to grow by leaps and bounds, said Sunil Rongala, senior vice-president – strategy, innovation and analytics, Worldline India.
On talks about the transaction fee being levied on UPI transactions, Rongala said, “Reality is that the UPI has become so ingrained, nothing substantial will happen. If take examples of cards: credit or debt, both have MDR (merchant discount rate) despite this, transactions have risen only.”
The average ticket size of UPI transactions in the first half of 2023 was Rs 1,603, which fell to to Rs 1,478 in the first half of this year. During the same period, the average ticket size of P2M transactions fell to Rs 643 from Rs 667.
On the recent announcement by the Reserve Bank of India on increasing transaction limit for UPI123 Pay and UPI Lite, Rongala said this may further lead to an uptick in transactions, especially in UPI Lite.
Three UPI apps — PhonePe, Google Pay and Paytm — continue to dominate the landscape in terms of volume and value. As of June 2024, these three apps accounted for 94.83% of all UPI transaction volume, down from 95.68% a year earlier.
The report also highlighted that credit cards are being preferred for high-value transactions. In June 2024, the total number of cards reached 1.45 billion, reflecting an 11% year-over-year increase.
Credit card transactions reached 2.04 billion, marking a significant 32% increase from 1.55 billion in January-June 2023. In contrast, debit card transaction values fell to Rs 2.60 trillion, an 18% decrease from Rs 3.17 trillion.