For the first time, NPCI has shared UPI granular data on the share of different transactions amount

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For the first time, NPCI has shared UPI granular data on the share of different transactions amount:

In a first, the National Payments Corporation of India (NPCI) which operates the Unified Payments Interface (UPI) has given a more detailed breakdown of person-to-person (P2P) and person-to-merchant (P2M) transactions executed on the platform.

In the month of February, UPI saw a total of 452 crore transactions amounting to Rs 8.26 lakh crore. Of those, 263 crore transactions worth Rs 6.63 lakh crore were P2P, while 189 crore transactions amounting to Rs 1.63 lakh crore were P2M.

Breakdown of UPI transactions by volume in February 2022. Source: NPCI website.

The new data by NPCI shows that 78 percent of P2M, and 59 percent of P2P transactions are up to Rs 500. Further in terms of volumes, transactions between Rs 501 and Rs 2,000 make up 15 percent of P2M and 20 percent of P2P volumes. Transactions above Rs 2,000 are just 7 percent of P2M and 21 percent of P2P volumes.

In terms of the values, transactions over Rs 2,000 make up the lion’s share owing to the large quantum. 87 percent of P2P transactions are above Rs 2,000 and 70 percent of P2M. The large number of transactions up to Rs 500 translate to only a 3 percent share of P2P exchanges, and 13 percent for P2M.

Breakdown of UPI transactions by value in February 2022. Source: NPCI website.

While UPI now enjoys a share of over 50 percent of retail transaction volumes in India, it continues to be the preferred mode of payment for low-value transactions. The limit for UPI transactions stands at Rs 2 lakh, up from Rs 1 lakh earlier.

However, for larger transactions, Indians prefer to do bank transfers through the National Electronic Funds Transfer (NEFT) or the Immediate Payment Service (IMPS).

To encourage further adoption and usage of UPI for low-value transactions, the Reserve Bank of India (RBI) Governor Shaktikanta Das also launched UPI 123Pay on March 8 which will allow customers to make UPI transactions through feature phones as well, except scan and pay.

NPCI has also released the app-wise data for the month of February and PhonePe continues to lead with a 47 percent share in monthly transaction volumes. PhonePe saw 212 crore transactions amounting to Rs 4.07 lakh crore.

Google Pay which is the second-largest player had a share of 34 percent with 152 crore transactions, valued at Rs 2.91 lakh crore. Paytm Payments Bank’s share stood at close to 16 percent with 14,075 transactions at Rs 86,299 crore.

Overall, transaction volumes and values witnessed a dip in the month of February which is attributable to the fact that there are lesser than usual days i.e. 28 days in this month, which means fewer transactional opportunities in general.

However, on a year–on–year basis, UPI transactions for February 2022 were up 97 percent in volume terms and 94 percent in value terms.

UPI, along with RuPay debit cards, falls under the zero-MDR policy, which mandates that merchants should not be levied any charge on accepting payments via this mode.

MDR or merchant discount rate is a key source of revenue for the payments ecosystem.

In the Budget 2021, finance minister Nirmala Sitharaman announced that the relief provided to the payments ecosystem in the previous budget (to reimburse MDR on UPI transactions up to a certain amount) has been extended to FY23 as well.

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