UPI's top checkout by volume in July: The grocery aisle dominates

Grocery stores and supermarkets recorded the highest over three billion Unified Payments Interface (UPI) transactions worth ₹64,881.98 crore in July, accounting for nearly a quarter of all UPI peer-to-merchant (P2M) transactions by volume, according to the National Payments Corporation of India (NPCI) data. 

This is the first time the payments body has released such detailed category-wise numbers. 

Moreover, debt collection agencies topped the charts by value, recovering ₹93,857 crore through 161.36 million transactions, showcasing new use cases of the real-time payments system, data reviewed by Business Standard showed. 

NPCI uploads new data points on UPI from time to time. One of the reasons to do that is to provide an ecosystem-level overview to all ecosystem participants, including banks and fintechs. The apex retail payments body has also published state-wise data on UPI transaction volumes and value recently. 

In July, UPI hit a record 19.46 billion transactions, processing a total value of ₹25.08 trillion. Out of this total volume, 63.63 per cent payments were P2M, with the rest being made to other peers (P2P) in terms of the volume of transactions. 

The volume and value of P2M UPI transactions stood at 12.38 billion and ₹7.34 trillion, respectively in July. 

However, about 2.26 billion transactions worth ₹3.48 trillion are classified as “others”, indicating they may include various other merchant categories, the data showed. 

While this is just 18.3 per cent of the total P2M volumes, it represents about 47.5 per cent P2M transactions by value. 

“Ecosystem participants can get meaningful insights from the data published by NPCI. It tells us how India spends, given that UPI accounts for five out of six retail payments in the country. Specifically, it provides fascinating insights on payment flows beyond the obvious ones like grocery,” said Ranadurjay Talukdar, partner and payments sector leader, EY India. 

Daily spends 

High frequency categories include groceries, restaurants, pharmacies, fuel service stations, bakeries, and utility services such as electricity, gas, water and sanitation. Nearly seven out of every 10 P2M UPI transactions take place in one of these categories, driven by the convenience of quick payments for everyday spends. 

“The high transacting categories are the here and now daily spends. This is where the convenience is coming in for payments. If you look at a household and the type of things that they spend on, the average household, it is going to come down to grocery, food and fuel,” said Vivek Mandhata, managing director and partner, Boston Consulting Group (BCG). 

Other categories such as purchase of digital items across games saw transactions worth ₹10,076.56 crore across 351.24 million transactions. This is lower than the 505.37 million transactions in April and 420.82 million in May for the same category, but higher than June’s 332.94 million transactions. 

Interestingly, the average spend across the category is recorded at ₹10,248 crore since April this year. April and May mark the high-intensity Indian Premier League (IPL) season for the real-money gaming industry. 

Striking categories 

The purchase of digital gold via UPI is steadily gaining momentum, as more fintechs roll out app-based options for buying gold. Indians bought gold digitally via UPI with 68.4 million transactions valued at ₹978.24 crore in April. This has steadily grown to 95.72 million purchases with a total value of ₹1,020.24 crore. 

Online marketplaces recorded just 75.76 million UPI P2M transactions with a value of ₹5,170.52 crore in April. It has grown to 122 million transactions at a value of ₹8,053.72 crore in July. This also comes at a time when many transactions at e-commerce websites happen via credit cards. 

Passenger railways, the backbone of India’s travel network, logged just 68.46 million transactions worth ₹3,807 crore in April. By July, volumes inched up to 73.85 million, while value dipped slightly to ₹3,658 crore.