The state-run National Payments Corporation of India (NPCI) has recorded a marginal decrease in the volume of unified payments interface (UPI) transactions, from 2.3 Bn last month (January) to 2.29 Bn in February 2021. The value of transactions through UPI also decreased marginally by 1.4%, from INR 4.31 Lakh Cr to INR 4.25 Lakh Cr in the same period.
This is the first time since April 2020 that UPI transactions have registered a decline in growth. However, it is important to note that the rate of growth for UPI’s transactions had been decreasing since October 2020 after it hit the 2 Bn transactions mark. The usage of this payments interface had increased by 11.8%, from 1.61 Bn in August to 1.80 Bn in September 2020. Then, grew a good 15% to 2.07 Bn in October 2020. Since then, the growth rate was 7% to 2.21 Bn in November and 0.9% to 2.23 Bn in December.
The payments interface had grown 3% with transactions growing from 2.23 Bn recorded in December 2020. The transaction value also increased by 3% from INR 4.16 Lakh Cr to INR 4.31 Lakh Cr that month.
BHIM UPI has been pushing the boundaries of digital payment acceptance in India by penetrating the remotest areas with easy, safe and instant P2P and P2M fund transfers. #BHIMUPI #DigitalPayments @dilipasbe pic.twitter.com/zIZewwXvv0
— NPCI (@NPCI_NPCI) March 1, 2021
UPI is currently leading the already-growing digital payments segment in India. According to the Reserve Bank of India (RBI) data, the digital payments ecosystem has increased at a compound annual growth rate (CAGR) of 55.1% over the past five years between 2016-2020. During this period, transactional value has grown from INR 920.38 Lakh Cr to INR 1,623.05 Lakh Cr, representing an annual compounded rate of 15.2%.
To further boost the digital payments ecosystem in the country, finance minister Nirmala Sitharaman, during her Union Budget speech for 2021, allocated INR 1,500 Cr to the sector.
IMPS Keep Dropping, FASTag Registers 7% Increase
Immediate Payment Service (IMPS), on the other hand, has been dropping since January 2021. The inter-bank electronic fund transfer system reported about a 5% month-on-month increase in December 2020, leading to 355.6 Mn transactions. However, it dropped by 2.5% in January to 346.5 Mn transactions. In February, the payments system reported another 8% decline to 318.7 Mn transaction. This was close to the numbers it reported in October 2020.
Easy, safe and reliant real-time transfers set IMPS apart from any other settlement system. The next time you go to a bank for instant fund transfers, choose IMPS. #IMPS #DigitalPayments @dilipasbe pic.twitter.com/ZgJKTh9vQf
— NPCI (@NPCI_NPCI) March 1, 2021
While the UPI and IMPS transactions fell, the government’s flagship electronic toll collection system FASTag grew 7% month-on-month, from 148.5 Mn transactions in January to 158.9 Mn.The system had recorded 138.4 Mn transactions in December 2020.
The value of transactions grew, from INR 2.3K Cr in January, 2021 to INR 2.5K Cr in February, 2021 registering a growth rate of 8.6%.
In an attempt to create a cashless network of contactless toll collection not only on highways, but also in parking lots, NETC FASTag has achieved the greatest heights in acceptance. #NETCFASTag #DigitalPayments @dilipasbe pic.twitter.com/c4Qy6mmb7v
— NPCI (@NPCI_NPCI) March 1, 2021
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