look news india
This festive season, Indian consumers have set a new historical record in digital payments, leaving behind traditional methods of shopping and transactions. According to the latest official data released by the National Payments Corporation of India (NPCI), a total of huge transactions worth ₹31.53 lakh crore were recorded through the Unified Payments Interface (UPI) in the month of October. This is the first time in India’s digital payments history that transactions through UPI have crossed the ₹31 lakh crore mark in a single month. Transaction value has seen a solid year-on-year growth (YoY) of 16 percent compared to the same period last year. The most important aspect of this surge was that during the entire month, an average amount of more than ₹ 1 lakh crore was transferred every day through UPI, which has proved the power of cashless economy to the whole world.
Not only did the transaction amount increase in the month of October, but an unprecedented increase was also recorded in the total volume of transactions. A record 25.47 billion successful transactions were processed on the UPI network during the entire month, which represents a strong growth of 23 percent over last year. If analyzed on daily level, an average of 822 million transactions were done in India every day. This means that over 9,500 payments are processed smoothly every second in the country. From local grocery stores, big shopping malls to online e-commerce platforms, UPI remains the most preferred and quick means of payment.
The main reason behind this record-breaking surge was the huge crowd gathered in the markets during the pre-preparations for Shardiya Navratri, Dussehra and Diwali-Dhanteras. Generally, UPI was used more for small payments (Micro-transactions), but this festive season saw a huge increase in larger ticket size (Higher Value Transactions) transactions. Consumers preferred UPI for festive sales of major e-commerce companies, electronics, home appliances, clothing, hotel booking and travel ticketing. Along with this, customers also resorted to UPI payment directly from bank accounts for advance booking of gold and silver coins and jewelery for Dhanteras in the bullion market, which led to a significant increase in the average price per transaction.
It is also clear from the October data that the share of person-to-merchant (P2M i.e. payment from customer to shopkeeper) is continuously expanding. The penetration of Soundbox and QR Codes in tier-2, tier-3 cities and rural towns of the country has almost eliminated cash dependence among retailers. With more than 95 per cent of P2M transactions being completely free from Merchant Discount Rate (MDR), small merchants accepted digital payments wholeheartedly without any additional cost. Apart from this, the facility of linking credit card with UPI (RuPay Credit Card on UPI) also increased the purchasing power of the customers, due to which an additional boost was seen in festive shopping.
Despite the huge traffic of more than 25 billion monthly transactions, the technical infrastructure of Indian banking and UPI remained completely stable and flexible. The rate of server downtime or transaction failure remained at negligible level, further strengthening consumer confidence. Along with setting new records in the domestic market, UPI is now rapidly crossing international borders and is accepted by Indian travelers in more than 11 countries. Economic experts estimate that due to Diwali, Bhaidooj and the upcoming wedding season, this storm of digital payments will continue at the same pace in November, which clearly indicates the strong consumption and consumption capacity of the Indian economy in the current financial year.