In the second half of 2023, India witnessed a remarkable surge in Unified Payments Interface (UPI) transactions.
- Volume Growth: UPI payments volume in H2 2023 soared by 56% year-on-year (YoY), reaching 65.77 billion transactions—a substantial increase from the previous year’s 42.09 billion transactions.
- Transaction Value: The value of these UPI transactions surged by 44%, climbing from Rs 69.36 lakh crore to an impressive Rs 99.68 lakh crore.
- Person-to-Merchant Transactions: The growth of UPI payments was largely driven by person-to-merchant transactions. During this period, these transactions witnessed a 77% increase in volume and a 62% increase in value.
- Point of Sale Terminals: The number of point of sale (POS) terminals, used by merchants to receive payments, expanded by 26%, reaching 8.56 million. Private banks played a significant role, accounting for 73% of the market share in this segment.
- Dominant Players: PhonePe, Google Pay, and Paytm continued to dominate the UPI market both in terms of value and volume. In December 2023, these three platforms accounted for 95.4% of all transactions, emphasizing their stronghold in the digital payments landscape.
- Average Ticket Size: Interestingly, the average ticket size within UPI payments decreased by 8% YoY. This indicates a higher penetration of UPI for small and micro everyday payments, typically made to merchants. Categories such as groceries, eateries, telecom services, pharmacies, and utilities topped the list, reflecting their high volume but relatively low value.
- Debit and Credit Cards: While UPI surged, the issuance of debit and credit cards experienced modest growth. Credit card issuance jumped from 13% in June 2023 to 21% in December 2023, while debit cards grew by only 2%
Q: What does UPI stand for?
A) Unified Payment Interface
B) Unified Payments Integration
C) United Payment Interface
D) Ultrafast Payment Integration
Answer: A) Unified Payment Interface
Q: Which type of transactions drove the growth of UPI payments in Second half of 2023?
A) Person-to-person transactions
B) Person-to-merchant transactions
C) International transactions
D) Bank-to-bank transactions
Answer: B) Person-to-merchant transactions
