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UPI and QR code payments skyrocket, hit all time high in 2021: Worldline report

UPI has managed to bridge the gap between P2P and P2M transactions.

By: Tech Desk | Pune |
Updated: December 3, 2021 4:07:31 pm
UPI payment growth is gaining momentum in India. (Image Source: Pixabay)

Despite pandemic related setbacks over the past two years, digital payments continued to grow across the country, said a new report by Worldline India titled ‘India Digital Payments Report Q3 2021’.

Clocking over 3.65 billion transactions in volume, Unified Payment Interface (UPI) volume achieved all time high transactions of Rs 4 billion and Rs 7.71 trillion respectively. From Q3 (July to September) 2021, UPI recorded a 103 percent increase in volume and close to 100 percent increase in value as compared with Q3 2020.

At least 54 percent of the UPI transactions were P2P (person-to person) while 46 percent were P2M (person-to merchant). It should be noted that 30 banks have joined the UPI ecosystem in Q3 2021, bringing the total number of banks providing UPI services to 259 as of September 2021.

The report notes that the total number of cards in circulation stood at 98.53 crores as of September 2021. Out of which, 92.03 crores were debit cards and 6.50 crores were credit cards, up by 8.65 percent and 10.78 percent year-on-year respectively.

Further, credit card transactions volume and value in Q3 2021 were 55.72 crores and Rs 2.32 lakh crores respectively. In Q3 2021, 148 crores transactions were processed through debit cards while the value stood at Rs 1.88 lakh crores.

The Point of Sale (POS) terminal count also witnessed an uptick through the year with 47.1 lakh transactions in January 2021 and 49.7 lakh in September 2021.

The report highlights that the number of  QR based payment acceptance solution is growing swiftly. As of September 2021, number of Bharat QR (BQR) transaction was 52 lakhs and UPI QR was 11.96 crores, witnessing an overall increase of 116 percent and 98 percent respectively.

This growth can be attributed to operationalization of Payments Infrastructure Development Fund (PIDF) Scheme by the RBI which envisages creating about 30 lakh merchant touch points every year from Jan 1, 2021 for three years. As of September 2021, the number of physical payment acceptance devices deployed under the PIDF Scheme were 2,45,000 while digital devices were over 55.3 lakhs.

Overall, private sector banks represent about 67 percent of the POS terminal market while public sector banks account for 26 percent. Payments banks accounted for 6 percent market share, and foreign banks continue to represent 1 percent share. HDFC bank, UCO Bank, Axis Bank, ICICI Bank, RBL Bank, State Bank of India are the top acquiring banks to deploy POS terminals.

At physical merchant touch points— groceries, restaurants, clothing and apparel, pharmacy and medical, hotels, jewelry retail, specialty retail, household appliances and departmental stores together accounted for over 40 percent in terms of volume and about 50 percent in terms value, the report adds.

Meanwhile, in the online space, e-commerce (shopping for goods and services), gaming, utility and financial services contributed to over 85 percent transaction in terms of volume and 4 percent in value.

Maharashtra, Tamil Nadu, Karnataka topped the states with the highest transactions at physical touchpoints, while Hyderabad, Bengaluru, Chennai topped in terms of cities.

“India is poised to be one the largest and fastest growing digital payments market in the world.  The PIDF status update published by RBI states that over 56 lakh physical and digital devices have been deployed across tier 3 to 6 centers in addition to north-eastern states as at end of September 2021,” said Deepak Chandnani, Managing Director at Worldline South Asia & Middle East.

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