scorecardresearch
Is cash still the king? Digital transactions surge in March led by UPI boom

Is cash still the king? Digital transactions surge in March led by UPI boom

India has embraced the digital transactions across all payment instruments, the data furnished by the National Payment Corporation of India (NPCI) for the month of March has indicated.

Digital transactions for March month have grown across all payment instruments led by UPI, the data by NPCI indicated. Digital transactions for March month have grown across all payment instruments led by UPI, the data by NPCI indicated.

India has embraced the digital transactions across all payment instruments, the data furnished by the National Payment Corporation of India (NPCI) for the month of March has indicated. The surge in the digital instruments was led by the Unified Payments Interface (UPI) which touched Rs 9.6 lakh crore transactions in March, 2022 compared to Rs 8.26 lakh crore (in value terms) in February, 2022. For FY22, the transactions have crossed the highest-ever at Rs 81 lakh crore mark, the data revealed. In terms of volume, UPI hit 5.42 billion transactions as against 4.52 billion transactions.

Despite the leading fintech firms raising concern over zero merchant discount rates (MDR) due to which the platforms say they have not been able to generate revenue, the UPI transactions have not seen any dent both in terms of value and volume.

The NPCI data also indicated that UPI, which accounts for a majority of the digital transactions share, is led by Peer-to-Peer (P2P) transactions as compared to Peer-to-Merchant transactions (P2M).

However, leading players in the UPI segment, including Google Pay, Walmart-backed Phone Pe, and Paytm, have gone big on onboarding merchants on their platforms to grab a larger share of the P2M transactions under which they also generate revenue by charging commissions.

The Aadhar-Enabled Payment system -- which facilitates cashless transactions via micro-ATMs -- its point of sales (PoS) transactions grew to Rs 29,162 crore in value terms as compared to Rs 25,514 crore in February, 2022. In terms of volume, the transactions increased to 105.29 million compared to 94.44 million in February, 2022.

As the economy got back on track and the offices re-opened, the mobility sector has revived, which was reflected in increased toll payments (Fastag) hitting Rs 4,095 crore value mark in March, 2022 compared to Rs 3,631 crore in February. The number of Fastag payments rose to 270 million in March, 2022 compared to 243 million in February.

With the impact of COVID wave receding and the RBI recently increasing the Immediate Payments Service (IMPS) transaction limit from Rs 2 lakh to Rs 5 lakh, the IMPS transactions for March month have also seen a rise. As per the NPCI data, the IMPS payments rose to 492 million in March compared to 420 million in February, 2022.