While the volume surged 57.3% in India during Q1, the states in the north-east reported growth in excess of 140%.
Uttar Pradesh and Haryana are the only two Indian states that saw a contraction in the UPI payments volume in the first quarter of the current fiscal year. Except for these two states, all the states, including those with a decline in IMPS volume, saw growth in UPI transaction volume, according to the latest RBI report. The growth in the volume of UPI payments was highest in the north-eastern states. While the volume surged 57.3 per cent in India during Q1, the states in the north-east reported growth in excess of 140 per cent. The trend highlights the user preference of UPI over IMPS during the pandemic, on account of its ease of usage and operability, especially for small value transactions.
It is to be noted that economically advanced states like Maharashtra and Delhi, which account for a higher share of total digital transactions, saw a significant fall in Immediate Payment Service (IMPS) transaction volume during the first quarter, compared to the fall of 9.6 per cent in all-India average.
Along with the government sector, other economic entities have been rapidly adopting digitalisation as an enabling tool in their operations. India has been one of the fastest-growing markets for digital transactions, with a rich variety of digital payment options. During the five-year period 2014-19, digital transactions per capita per annum increased from 2.4 in 2014-15 to 22.4 in 2018-19, RBI said.
During 2019-20, the first eleven months witnessed an on-year growth in volume of digital transactions in excess of 45 per cent. Though this trend snapped in March 2020 when the COVID-19 pandemic and the disruptions brought economic activity to a near standstill, the volume of digital transactions rose as the lockdown was gradually rolled back. In terms of volume, digital transactions contracted in April 2020 for the first time in several months. However, in terms of value, digital transactions had been contracting consistently since October 2019 and during the early months of the pandemic.