UPI transactions surge to Rs 5.47 lakh crore in June

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After showing a fall in consecutive months in April and May, digital payments using Unified Payments Interface (UPI) have shown a sudden upsurge in June. The latest numbers released by the National Payments Corporation of India (NPCI) show that the instant fund-transfer technology has created a record of sorts in both volume and value.

It has reported 2.8 billion transactions worth Rs 5.47 lakh crore in June. Individual company-wise data is yet to be uploaded by NPCI.

The number of banks currently live on UPI platform has gone up to 227, up from 224 in May, according to NPCI.

The consecutive drop in digital payments using the popular UPI facility in the first two months of 2021-22 had raised concerns. Many suspected that the payment mechanism had probably hit an upper circuit. With the June numbers out now, it is clear that the localised lockdowns across the country had taken the wind out of India’s digital payments using UPI in April-May and that they have bounced back, once again.

Second wave trimmed economic activities

As the second wave of the pandemic trimmed the economic activities, overall digital transactions had taken a downward swing in the first two months.

In May, there were around 2,540 million transactions using UPI, totalling Rs 4.91 lakh crore. In April, UPI transactions stood at 2,641 million, amounting to a total of Rs 4.94 lakh crore.

In March, NPCI reported 2,732 million UPI transactions with a total of Rs 5.05 lakh crore.

In May, Walmart-owned PhonePe, the leading player in the UPI market, saw a marginal drop in volumes, but with an increase in total value of transactions. It handled 1,150 million transactions with a total value of Rs 2.34 lakh crore, down from 1,199 million transactions reported in April (with a total value of Rs 2.31 lakh crore). As the total market size shrank, PhonePe increased its market share marginally in May to 45.27% from 45% in April. It had reported a market share of 43.9% in March.

Over the last one year, UPI transactions had been growing continuously, except for a dip reported in February 2021.

Market leaders

As the top players such as PhonePe and Google Pay have already cornered a substantial pie of the market, NPCI, in November 2020, placed a 30% cap on the number of UPI transactions for all third-party payment apps. The move was aimed at ensuring that a few players don’t monopolise the digital payments landscape, leading to an overload and a potential collapse.

A senior industry official said the idea was to create a situation where third-party service levels do not create any disturbances. At present, two players are above the 30% level, while the third player’s (Paytm) share is coming down.

A clearer picture will emerge when NPCI uploads the data with individual player’s performance in the next few days.