Continuing on an upward trajectory, digital payments in January saw decent growth with Unified Payments Interface (UPI), the flagship payments platform of National Corporation of India (NPCI), touching a new high both in terms of volume and value.
As per data released by NPCI for January, UPI recorded 2.3 billion transactions worth Rs 4.3 trillion, up 3 per cent both in volume and value terms respectively. On a year-on-year basis, UPI’s transaction volume jumped 76.5 per cent while transaction value jumped almost 100 per cent. They breached the 2-billion (volume) mark for the fourth straight month.
In December, it had handled 2.23 billion transactions worth Rs 4.16 trillion and in November it processed 2.21 billion transactions worth Rs 3.90 trillion. Launched in 2016, UPI crossed 1 billion transactions for the first time in October 2019. While it took UPI three years to reach a billion transactions in a month, the next billion came in just a year.
Digital payments, especially UPI, saw increased adoption in 2020 due to the Covid-19 pandemic. Notwithstanding the minor blip in the initial months of the Covid-19 pandemic, where transaction volume and value dipped, the recovery was fast and NPCI's payment platforms namely UPI, Immediate Payment Service (IMPS), and others recorded fresh highs in the following months aided by aversion towards cash usage as well as card usage by the general public.
In January, Immediate Payments Service (IMPS) declined by 2.5 per cent in transaction count at 346.55 million, from 355.69 million transaction in December 2020, while value shed 1.38 per cent in the same period. However, year-on-year the transaction count grew 33.5 per cent. Bharat Bill Payment System recorded 27.24 million transactions in January worth Rs 4,051.92 crore. It had recorded 26.22 million transactions in December, worth Rs 3,962.76 crore. And, in November, it recorded 23.93 million transactions worth Rs 3,713.21 crore.
Similarly, NPCI’s NETC-operated FASTag recorded 148.56 million transactions worth Rs 2,397.84 crore in January 2021. In December 2020, it had reported 138.41 million transactions worth Rs 2,303.79 crore, while in November, it had recorded 124.88 million transactions worth Rs 2,102.02 crore.
In the recently released booklet named “Payments and Settlement Systems in India” the RBI said, the acceptance and growth of digital payments has been exponential over the years. From 4.98 billion transactions with a value of Rs 96 trillion in FY11, digital payments have grown to 16.23 billion transactions with a value of Rs 3,435 trillion in FY20. This represents a compound annual growth rate (CAGR) of 12.54 per cent and 43 per cent in terms of volume and value, respectively.
Looking at the impressive growth in digital payments, in the Union Budget of 2021-22, the finance minister provided Rs 1,500 crore that will be used to promote digital modes of payment to give further boost to digital transactions.