That UPI has been taking some share away from more traditional modes of digital payments, cards and netbanking among them, has been evident for a while now.
The share of Unified Payments Interface (UPI) in person-to-merchant (P2M) digital transactions rose to 34% in the quarter ended June 2019 from 12% in April 2018, according to a report by payments services provider Razorpay. UPI was second only to credit and debit cards, which contributed 56% of merchant digital payments in the June quarter.
Between the March and the June quarters of 2019, UPI usage shot up 71%. Harshil Mathur, co-founder and chief executive officer (CEO), Razorpay, said within the fast-growing digital payments pie, UPI is becoming a preferred mode of payment for many. “UPI with a 71% growth is now recognised as the de-facto mode for online payments, both by consumers and businesses, and I believe it will continue to lead the way with more customised offerings and features to drive financial inclusion,” Mathur said.
Google Pay continues to be the most preferred UPI app with a contribution of 57% to all transactions. “Although PhonePe contributed 26%, it saw the highest adoption growth of 82% since the March quarter. Other players, BHIM (8%) and Paytm (7%) continue to decline in UPI contribution, compared to the March quarter,” the Razorpay report observed.
That UPI has been taking some share away from more traditional modes of digital payments, cards and netbanking among them, has been evident for a while now. The value of transactions on the UPI platform in January at `1.09 lakh crore overtook those made by debit and credit cards at `1.05 lakh crore.
Ramaswamy Venkatachalam, managing director – banking and payments, FIS, said: “Clearly, UPI is moving towards making wallets nearly redundant and is fast emerging as a merchant preferred payment method as well, in addition to being perhaps the most popular P2P (person-to-person) mode,” Venkatachalam explained.