In a report released on December 20, it was revealed that United Payments Interface (UPI) transactions at retail stores in rural and semi-urban Bharat have seen a remarkable surge of 118% in 2023 compared to the previous year. This signifies a substantial increase in the adoption of online payment methods in Tier-II cities, showcasing a shift in consumer behaviour towards digital transactions. By value, the transactions also witnessed a significant rise, increasing by 106%.
The report, titled ‘Retail-O-Nomics’ and conducted by fintech firm PayNearby, indicates that the acceptance of Mobile Point of Sale (mPOS) has grown by 5% in 2023. This suggests a growing trend of utilising mobile devices for retail transactions, making it easier for businesses in these regions to engage in digital commerce. The study surveyed over a million shops between January and November to gather comprehensive data.
The scope of UPI transactions goes beyond traditional banking services, encompassing digital services such as utility payments, cash collection, credit, insurance, assisted commerce, and more. This shift in consumer behaviour highlights a significant move towards assisted digital methods for various banking and lifestyle needs, contributing to the integration of these regions into the formal economy.
Government data presented in Parliament on December 18 reinforces the impact of UPI on the overall growth of digital payments in Bharat. The statistics reveal a remarkable growth trajectory for UPI transactions, soaring from 92 crore in 2017-18 to a staggering 8,375 crore in 2022-23, with a Compound Annual Growth Rate (CAGR) of 147% in terms of volume.
This surge in digital transactions has not only reshaped the financial landscape but has also influenced the physical circulation of banknotes. The government disclosed a 7.8% decrease in banknote circulation during the fiscal year 2022-23, attributing it to the widespread adoption of UPI and other digital payment methods. The minister of state for finance, Bhagwat K Karad, highlighted that UPI has played a pivotal role, accounting for 62% of digital payment transactions in 2022-23.
As a result of these transformative changes, the government emphasises the continuous growth and impact of UPI, not just as a mode of transaction but as a driving force shaping the future of digital payments in the country.
NE Watch Desk
