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The localised lockdowns across the country have taken the wind out of India’s digital payments using Unified Payments Interface (UPI). The latest data released by the National Payments Corporation of India (NPCI) shows that UPI payments, which reported a fall in April, have fallen further in May 2021.

Transactions

There were around 2,540 million transactions in May using the instant fund-transfer technology, totalling Rs 4.91 lakh crore. In April, UPI transactions stood at 2,641 million, amounting to a total of Rs 4.94 lakh crore. In March, NPCI reported 2,732 million UPI transactions with a total of Rs 5.05 lakh crore.

Walmart-owned PhonePe, the leading player in the UPI market, saw a marginal drop in volumes, but with an increase in total value of transactions. It handled 1,150 million transactions with a total value of Rs 2.34 lakh crore, down from 1,199 million transactions reported in April (with a total value of Rs 2.31 lakh crore). As the total market size shrank, PhonePe increased its market share marginally in May to 45.27% from 45% in April. It had reported a market share of 43.9% in March.

Industry experts believe that the trend may continue in June before taking a U-turn as lockdowns have severely hampered industrial production and other economic activities in several states.

Decline in volumes

The two other leading UPI players — Google Pay and Paytm Payments Bank — have both reported a drop in their volume. Google Pay, the second biggest player, registered 881 million transactions in May amounting to Rs 1.87 lakh crore, as per NPCI data. It had reported 906 million transactions worth Rs 1.9 lakh crore value in April.

Paytm Payments Bank App, at distant third, handled 344 million transactions worth Rs 43,741 crore. It had reported 373 million transactions (amounting to Rs 41,470 crore) in April. This means that though the number of transactions dropped, an increase in average transaction value helped Paytm record a higher transacted value.

Amazon Pay, the fourth largest player, has however managed to buck the trend. It handled 58.35 million transactions with a value of Rs 4,783 crore, up from 49 million transactions worth Rs 4,272 crore, handled in April. In March, it had reported 52 million transactions amounting to Rs 4,457 crore.

YES Bank Apps reported 21.08 million transactions accounting for Rs 4,487 crore, marginally ahead of BHIM in terms of volume. BHIM reported 21.02 million transactions worth Rs 6,776 crore. In April, YES Bank Apps handled 22.8 million transactions, ahead of BHIM’s 22.3 million.

In May, ICICI Bank Apps reported 13.2 million transactions accounting for Rs 4,514 crore, down from 14.4 million and Rs 3,828 crore in April.

In comparison to the private banks, apps of State Bank of India, India’s largest commercial bank, transacted 3.7 million transactions in May, accounting for Rs 2,079 crore.

The Facebook-owned WhatsApp Payments, which rolled out the UPI payments feature in November 2020, posted 0.51 million transactions amounting to Rs 48.15 crore in May. In the previous month, WhatsApp Payments reported 0.54 million transactions accounting for Rs 48 crore. NPCI had allowed the messaging app to expand its UPI user base in a graded manner starting with a maximum registered user base of 20 million.

Over the last one year, UPI transactions had been growing continuously, except for a dip reported in February 2021.