New Delhi [India], May 10 : Digital payment facilitator, PayU, reported an increase in transactions using the Unified Payments Interface (UPI) from 25.48 percent in September last year to 77.87 percent in March.
According to PayU insights, UPI which is already changing the P2P (Peer to Peer) payments space has also seen immense popularity in the P2M (Person to Merchant) payments. The insights also determine how sticky long-term usage will be as UPI aims to become the primary payment instrument for conducting commerce across the country.
PayU Insights indicate that wallet transactions have reduced to 22.13 percent in March 2018 from 74.52 percent in September 2017, largely due to the mandatory KYC regulations that recently led to a lot of users discontinuing its usage. On the other hand, UPI has seen an increase of about 200 percent on transactions processed through PayU.
PayU transactions trends showcase that UPI has fared well not just in comparison to wallets but other modes of payments such as debit and credit cards. The UPI initiative, backed by the government, has dominated the digital payments space across verticals and has witnessed a massive rise in transaction volumes.
Of the overall transactions processed through PayU's platform, UPI has seen growth in volume and size of transactions as compared to the other payment options. The increase in average transaction size, using cards, both credit, and debit, have been marginal by 19 and 11 percent respectively, whereas UPI has seen a considerable increase by 188 percent on the PayU gateway.
The growing popularity of UPI could be attributed to the fact UPI players offer lucrative cashback to incentivise customers which could be a vital reason for UPI's growing popularity.
"UPI has come as a boon for ease of transactions for the consumers of India. It has greatly affected the transaction volumes of other payment options on the PayU payment gateway. Consumers now want money to move as quickly as sending a message and UPI is the key to it," said B. Amrish Rau, CEO at PayU India.
Among all the players in the market offering UPI services, BHIM, Tez, and PhonePe have emerged as the dominant ones. Tez has been able to massively increase its share of PayU transactions over time by increasing from 6.86 percent in September last year to 44.92 percent in March 2018, making it the leading player in the UPI space. However, BHIM, which was the top platform in September, has now decreased its share to 21 percent from the initial 41.20 percent.
As per PayU insights, consumers prefer to use UPI mode of payment while shopping on e-commerce sites. Of the total UPI transactions processed through PayU, 72.43 percent comes from e-commerce sites followed by professional technical services and education which have close to nine and five percent share respectively.