The gap between transaction values on the Unified Payments Interface (UPI) channel and mobile wallets substantially narrowed in the first six months after demonetisation, even as the former continued to constitute a fraction of the latter, data released by Reserve Bank of India (RBI) showed. During April, the UPI channel clocked an aggregate Rs 2,198.92 crore in transaction value, a fifth of Rs 10,371 crore recorded by wallets and other prepaid payment instruments (PPIs). At the end of November — the month in which the government withdrew Rs 500 and Rs 1,000 currency notes — UPI transactions added up to only Rs 90.52 crore, a fifty-fifth of the aggregate Rs 5,074 crore for wallet transactions. UPI later hit a record Rs 2,770 crore in total transaction value in May. The corresponding value for PPIs is not available. Data sourced from eight non-bank issuers of PPIs showed transaction value of Rs 2,530 crore in May, according to the RBI. Mobile wallets account for roughly over 86% of PPI transactions in terms of volumes.
In terms of ticket sizes, both modes have moved in a fairly narrow band over the six months under review. The average wallet transaction involved a transfer of Rs 300 in November and was down to Rs 294 in April, having peaked at Rs 374 in December.
UPI transactions had an average ticket size of Rs 3,121 in November and Rs 3,178 in April, with the peak of Rs 4,572 being seen in February.
The average value of a UPI transaction is typically higher than that of a wallet transaction because use of the former channel has so far been limited to peer-to-peer payments, while wallets are more commonly used to make small-value payments to merchants.
National Payments Corporation of India (NPCI), which operates the UPI channel, has been working to increase the use of the channel for peer-to-merchant payments, an area where it will be come in direct competition with wallets.
On May 25, NPCI chief operating officer Dilip Asbe had told FE that 15-20% of the daily volume of UPI transactions was coming from merchant payments on e-commerce platforms. “We have to still cover top 300 merchants on the UPI to offer UPI payments, which I expect we will be able in the next two to three months,” he had said.