The value of transactions on the Unified Payments Interface (UPI) platforms in July increased by more than two times as compared to the year-ago period, outstripping card payments which increased by 42%, according to the latest data from Reserve Bank of India (RBI), The Economic Times reported. By value, UPI transactions reached their highest ever in July at Rs 6.06 lakh crore, going past the previous record of Rs 5.47 lakh crore in June, which was 2.91 lakh crore in the year ago period.
Propelled by the increasing use of digital payments for daily essentials at local stores and premium purchases, UPI platform had a 109% rise.
Reportedly, the economy is showing signs of recovery and the discretionary spending by cards has grown. However, it couldn’t match the growth in UPI transactions.
Digital payments made on UPI platforms and wallets increased to almost 3.25 billion in July as against 1.5 billion in the year ago period. On the other hand card payments increased from 450 million a year ago to 520 million this year.
UPI payments have showed increased traction in the past one year due to the convenience and contactless transactions as compared to card swiping, where contact points are higher, the publication said.
Also, unlike card transactions which are only for payment to merchants, UPI comprises both peer to peer and merchant payments, and at the current growth rate it will outpace card payments, it added.
It also said that though UPI payments are growing faster, card payments are also growing. Axis Bank reported that the card segment is growing at 30-40% which is healthy.
Further, payments on UPI, payment platforms and wallets account for 10-15% of sales at a electronic retail chain reported in the publication. The platforms also offer cashback incentives to attract customers, it added.
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