UPI payments value nearly doubles in June from February

The aggregate monthly value of transactions made through the Unified Payments Interface (UPI) more than doubled between February and June this year, corresponding with the implementation of the Reserve Bank of India’s (RBI) revised guidelines for KYC of mobile wallet users.

According to data released by the National Payments Council of India (NPCI), the value of UPI transactions for June stood at Rs 40,834 crore, as against Rs 19,126 crore during the month of February. This, while the volume of transactions has risen only around 44% over the same period. In June, the monthly volume of UPI transactions crossed the 200-million mark to clock a total of 246.37 million transactions. This marks a recovery in the growth trend as May had seen volumes slip for the first time on a month-on-month basis since the launch of the payment mode.

Issuers of mobile wallets were required to ensure that all their users turned fully KYC-compliant by February 28, 2018 in order to continue loading money into their wallets. As the KYC procedure takes away much of the inherent convenience of using a wallet, the first week of March had seen wallet transactions drop by 40-45%, according to payment industry players.
While wallet usage seems to have stabilised subsequently — recording volumes of 269 million and 279 million in March and April respectively — they are still lower than the February aggregate of 310 million. Data on wallet usage for the months of May and June is not available yet.

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The jump in the value of UPI transactions suggests that some wallet users may have switched to UPI in recent months. The introduction of cashbacks for the use of the Bharat Interface for Money (BHIM) app may also have pushed transactions of higher value.

Digital payments in India, currently estimated at around $200 billion, are projected to rise fivefold in the next five years to touch $1 trillion, according to an estimate made by Credit Suisse. At this point, the value of digital payments will rise from around 10% right now to around 25%, a February report by the investment bank stated.