A new report published on Wednesday indicates a staggering 42% year-over-year (YoY) growth in Unified Payments Interface (UPI) transactions in the second half of 2024, at a whopping 93.23 billion transactions.
India's digital payments ecosystem continues to grow exponentially, with significant milestones achieved in the second half of the year, as per research by Worldline, a financial services company.
The volume of UPI transactions also reached a record 88.54 billion, with a 41% rise when compared to the same period of the last fiscal year. That trend reflects people's increasing demand for mobile-led financial services facilitated by the convenience of digital payment apps and digital wallets, highlighted the report.
The overall transaction value of UPI transactions saw a remarkable upsurge and rose 31% to an incredible ₹130.19 trillion.
One of the key drivers of this growth has been the speedy acceptance of UPI QR codes, which witnessed a phenomenal 126% growth to 633.44 million codes across the country. This growth has further supported digital payments for merchants, allowing small and local merchants to adopt cashless modes of payment.
"India’s digital payments ecosystem is evolving at an unprecedented pace, driven by UPI’s widespread adoption, the expansion of POS infrastructure, and the growing preference for mobile transactions,” remarked Ramesh Narasimhan, CEO of Worldline India.
One other notable trend presented in the report is the consistent increase in Point of Sale (POS) terminals, crossing the 10 million milestone. Deployments at POS systems registered a 23% rise this year over the last year and are becoming more popular, especially in rural and semi-urban areas.
The report also highlights the increasing adoption of SoftPOS technology, which allows merchants to turn their smartphones into secure contactless payment terminals. This technology is transforming merchant transactions, especially for small businesses, by doing away with the requirement for expensive POS hardware.
With the Mobile Payment on Contactless (MPoC) security standards in place, these transactions are safe even for large-value payments.
Consumer expenditure patterns too have changed, with credit card usage increasing by 36% as a representation of greater use of them to make high-ticket purchases. While prepaid card use increased by 35%, there is a tendency towards more payment flexibility. Electronic toll collection in the form of FASTag experienced a 12% increase to over 103 million issued tags.
Based on patterns of spending, grocery stores, restaurants, pharmacies, and government services ranked highest as the most frequensted categories for in-store payments, with combined transaction volume of 68% and transaction value of 53%.
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