Credit and finance for MSMEs: 20.57 billion transactions in volume and Rs 36.08 trillion in value were processed in the second quarter (April-June) of the calendar year 2022 through contactless payment instruments, according to a report released by global payment gateway company Worldline’s India arm on Tuesday. Person-to-person (P2P) payments via UPI accounted for lion’s share of 49 per cent in volume and 67 per cent in value while in terms of merchant transactions, UPI person-to-merchant (P2M) emerged as the preferred payment mode with a market share of 34 per cent in volume and 17 per cent in terms of value.
Payments through credit and debit cards accounted for 8 per cent in volume and 14 per cent in value while prepaid payment instruments like mobile wallets and prepaid cards had only 2 per cent volume share and 1 per cent value share.
In terms of the average ticket size (ATS), Rs 820 was the average UPI P2M transaction amount, similar to June 2021 while UPI P2P had an ATS of Rs 2,425, down from around Rs 2,900 in June last year. “The average ticket size of UPI P2M is one-third of UPI P2P. This, however, should be seen as a success because it means that even micro-transactions are going through UPI instead of cash,” the report noted.
Moreover, the number of point-of-sale (POS) terminals deployed by merchant acquiring banks increased by 43 per cent to 6.59 million as of June 2022 from the year-ago period. Private sector banks had a share of about 74 per cent of the POS terminal market followed by 18 per cent held by public sector banks, 7 per cent by payments banks and 1 per cent by foreign banks.
“2022 is another momentous year for the payments space in India. We are successfully sailing through the aftermath of Covid-19, the total cards in circulation have breached the 1-billion mark, UPI is tracking over 6 billion transactions per month, about 53 million FASTags have been issued, and over 20k billers are live on the Bharat BillPay ecosystem. This demonstrates a robust payment ecosystem which is built to serve the diverse and growing needs of Bharat,” said Ramesh Narasimhan, Chief Executive Officer – India, Worldline.
India’s P2M market is likely to reach Rs 84 lakh crore by FY25 from around Rs 18 lakh crore in FY19 with Paytm, PhonePe, Google Pay, etc., among prominent players. The country’s overall digital payments industry is estimated to be worth over Rs 7,000 lakh crore by 2025, according to data platform Statista.
Importantly, Paytm had reported a 72 per cent year-on-year increase in its merchant payment volumes for the July and August period to Rs 2.10 lakh crore from Rs 1.22 lakh crore during the year-ago period. On the other hand, PhonePe had in September announced that has digitized 80 lakh offline merchants as a part of the RBI PIDF (Payments Infrastructure Development Fund) scheme in the last eighteen months and 3.2 crore merchants till September 5 since its launch in 2015.