Unified Payments Interface (UPI) has continued to dominate the Indian digital payments space, with transactions volume increasing by a staggering 56% to 65.77 billion in the second half of 2023 from 42.09 billion in the corresponding period a year ago, according to a report by global payments technology firm Worldline.

During the period, the value of transactions expanded by 44% to Rs 99.68 lakh crore from Rs 69.36 lakh crore year-on-year.

However, the interesting number continues to be the average ticket size (ATS) which dropped by 8% to Rs 1,515 in the second half of 2023 from Rs 1,648 in the same period of 2022.

“The ATS continues to be on a secular downtrend suggesting a deeper embedding of UPI – it is being used for smaller or micro transactions and this dip is being primarily driven by the growth in person-to-merchant (P2M) transactions,” the report said.

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P2P and P2M Transactions

UPI transactions consist of person-to-person (P2P) and person-to-merchant (P2M) transactions. Both these segments have clocked good growth numbers.

P2P transactions saw a 34% year-on-year increase to 27.04 billion in the said six months from 20.25 billion in H2 2022. The value of P2P transactions grew 38% year-on-year to Rs 74.24 trillion from Rs 53.69 trillion.

P2M transactions witnessed a 77% increase in volume, rising to 38.73 billion in the January-June period of 2023 from 21.84 billion in the corresponding six months of 2022. The value of P2M transactions rose 62% year-on-year to Rs 25.43 lakh crore in H2 2023 from Rs 15.66 lakh crore in the second half of 2022.

Average Ticket Size

The average ticket size (ATS) of all UPI transactions fell 8% to Rs 1,515 in the second half of 2023 from Rs 1,648 in H2 2022. For P2P transactions, the ATS saw a 4% YoY growth at Rs 2,745 against Rs 2,649. During the same period, the ATS of P2M transactions decreased to Rs 656 from Rs 720, logging a 9% drop.

“This gives a clear indication that the reduction in overall ATS has been driven by P2M transactions which is a good trend as the future of UPI is P2M transactions,” according to the Worldline report.

Top UPI apps, Remitter and Beneficiary Banks

In terms of volume and value, three apps — PhonePe, Google Pay and Paytm — were the dominant UPI app players. In December 2023, these three accounted for 95.4% of all the transactions in terms of volume which was 94.8% in December 2022. In terms of value, these three apps together captured 93% in December 2023 against 92.2% in the same period last year.

Top 5 Remitter and Beneficiary Banks Involved in UPI Transactions

The top five remitter banks (in December 2023) were State Bank of India, HDFC Bank, Bank of Baroda, Union Bank of India,
and Punjab National Bank.

On the other hand, the top five beneficiary banks were Paytm Payments Bank, Yes Bank, SBI, Axis Bank and ICICI Bank. It must be noted that this report is for H2 2023 before the Reserve Bank’s action on Paytm Payments Bank.