The 45% month on month increase is the highest so far for UPI since demonetisation. Demonetisation appears to have sustained India’s increased adoption of digital modes of transaction despite the ongoing debate about the impact of the November currencynote swap on the country’s parallel economy.
Provisional payments volume data for August show that more Indians used plastic currency or wire transfers, with a steady rise in digital transactions over the past three months. At 883 million, August led July and June, which logged 860 million and 844 million transactions, respectively, central bank data show. This is the closest to March’s 893 million transactions, the record since demonetisation.
Bankers and payment executives say that the early discount and festive season sale offered during August has played a major role in the volume of digital payments.
Leading the pack was Unified Payments Interface (UPI), which the central bank and the government are pushing to drive retail digital payments. UPI clocked 16.6 million transactions in August against 11.4 million the previous month. The 45 per cent month on month increase is the highest so far for UPI since demonetisation.
“Even our numbers show a similar growth. It could be because of new merchants who have opened UPI-based payments on our platform and also because of new promotional campaigns and offers that we have been running,” said Sameer Nigam, founder of PhonePe, the payments arm of Flipkart.
Besides UPI, the growth has been sustained by card swipes at point of sales terminals for merchant payments.From around 205 million in November, the transaction volume for August has reached 243 million.
This is still less than 311 million transactions seen in December just after demonetisation was announced. Subsequent availability of currency notes and the emergence of other modes of digital payments have had an impact on the rate of expansion in card payments.
“August growth has been mainly driven by discount offers run by retailers for Independence Day, Raksha Bandhan and Ganesh Chaturthi,” said Rajeev Agrawal, managing director at Innoviti Payments Solutions. “The numbers show a big jump also because July was a slow month due to the onset of GST, which made retailers go a bit slow.”
IMPS or Immediate Payments System for direct transfer of funds between bank accounts has reached the highest since demonetisation, clocking 75.7 million transactions against last month’s record of 69 million.