In the digital model of the payments ecosystem, fintech is taking over the conventional ways, with improved adoption of digital payments owing to the Covid-19 pandemic. In series with the transformation, like every month, the National Payments Corporation of India (NPCI) has appeared with its UPI and other digital payment figures for September 2021.
In September 2021, 3.65 Bn transactions worth INR 6,54,351 Cr were reported. In July and August 2021, the figures were INR 6.06 Lakh Cr and INR 6.35 Cr, thus, describing the growth rate of transactions size as well value in September by 2.3%.
Compared to around 10% monthly increase in transaction volume and 5.4% month on month growth in transaction value in August, NPCI recorded only 2.8% growth in transaction volume and 2.3% growth in value sequentially throughout September.
With its focus on digitizing the cash-based economy, the government and the Reserve Bank of India started the UPI through the NPCI five years ago in August 2016. But it struggled with users adoption, particularly on the person-to-merchant payments (P2M), even if person-to-person (P2P) payments caught on.
— NPCI (@NPCI_NPCI) November 1, 2021
In March 2021, UPI inscribed its best-ever figures (till then) with 2.73 Bn transactions (20% month on month growth), amounting to INR 5.04 Lakh Cr. From March 2021 to September 2021, UPI transactions have risen by 50%, posturing a concern to the regular cash and card payments system.
Significant UPI players in India are PhonePe, IPO-bound Paytm, Google Pay. While WhatsApp Pay has made a delayed entry to the party, it is yet to report notable transaction volumes. While NPCI has not yet published the app-wise performance data for September 2021 transactions, a glance at August transactions shows that PhonePe continues to dominate the UPI transactions market — nearly half the market scope at 47%, accompanied by Google Pay at 35%.
These numbers came quickly after Union Minister of Commerce & Industry Piyush Goyal, addressing the 2nd Global Fintech Fest, stated that at 87%, India has the biggest financial technological (fintech) adoption rate in the world toward the global average of 64%.
Goyal said that the UPI banking interface registered 3.55 Bn transactions in August 2021, the highest-ever so far (the present numbers beat the existing record). He also continued that over 2 Tn transactions were processed using the AePS (Aadhar-enabled payment system) in FY20.
In September only, NPCI announced that 344.21 Mn AePS transactions were processed at INR 22,852 Cr valuation — a 15% drop from August 2021, where 108.48 Mn transactions worth INR 26,894 Cr were recorded.
During October the UPI transaction crossed one more milestone, with the value of transactions for the month crossing $100 billion.
In rupee terms, the value of transactions stands at Rs 7.71 lakh crore and 421 crore transactions were executed in the month, both at all-time highs.
Speaking at the Global Fintech Fest on September 29, NPCI MD and CEO Dilip Asbe had stated that UPI would constitute close to 60 percent of overall NPCI transaction volumes in 2021.
He had added that UPI can cross transactions worth $1 trillion a day in five years at the current pace, but that efforts can be doubled up to achieve the milestone in just three more years.