For the first time, the Unified Payments Interface (UPI) has cross two billion transactions in the month of October. Experts have attributed this to the race in online shopping which has been driven by the festive seaon and massive discounts.
According to data released by the National Payments Corporation of India (NPCI), UPI processed a total of 2.07 billion transactions worth Rs 3.86 lakh crore in October. The nearly two-fold leap has been driven by the COVID-19 pandemic which prompted widespread adoption of digital payments, mainly amongst first-time users. The NPCI-backed channel was launched in 2016, and took it over three years to mark its first billion transactions. The payments are backed by third party applications and payment service providers like Paytm, Google Pay and PhonePe etc. providing front-end interface for the users.
The billion plus transactions has also been accompanied by a heavy increase in transaction failure rates. Reports said several lenders, mainly public sector banks showed sharp spike in technical decline rates. Besides, other NPCI operated channels have also witnessed a surge, with data showing that not only a growing tendency towards digital pay modes but also a slow recovery in spending trends. Moreover, the National Electronic Toll Collection (NETC) recorded 122 million transactions worth Rs 2,137 crore in October.
PwC in its 2020 report pointed out that digital payment volumes are receiving a boost through the Government, which has pledged monetary assistance to the poor via direct transfers to bank accounts. The Finance Minister and the CEO of National Payments Corporation of India had urged people to increase the use of digital payments in order to make payments contactless. PwC said digital payments have become a necessity in these times, with majority of the sectors that contribute to digital payments still in a state of flux. Weforum said that embedded in the programmatic use of technology by the state are two promises which have historically been difficult to fufill in India, which are speed and the plugging of leakages. It said the use of digital technology led to savings of nearly $23 billion, 98 per cent of this by eliminating erroneous beneficiaries.