Total value of transactions grew 23.3% QoQ to Rs 921,674 cr: PhonePe Pulse

Offline merchant payments grew faster than online merchant payments

The total payments value (TPV) of transactions processed grew 23.3 per cent Quarter-on-Quarter (QoQ) to Rs 9,21,674 crore while the number of transactions grew by 33.6 per cent to 5265 million transactions, according to digital payment trends from fintech firm PhonePe’s Pulse’s Q3 (July - September) 2021 data. The new data shared on the Pulse website, and as part of the Pulse quarterly report, shows the tremendous pace at which digital payments continued to grow in Q3FY2021.

The continued growth in both these metrics is a clear indication of increasing consumer trust in digital payments. For the first time ever, money transfers with UPI (unified payments interface) and merchant payments hit a new milestone of over 2000 million transactions clocking 2210 million and 2310 million transactions, respectively.

Offline merchant payments (such as paying at kiranas in-store) grew faster than online merchant payments (such as ordering food or shopping online) registering a QoQ growth rate of 65 per cent which is an indicator of recovery post the second wave of the Coronavirus (Covid-19) pandemic and stores rapidly opening up.

“The rapid growth we are seeing quarter on quarter is a strong indicator that digital payments are truly penetrating across the length and breadth of the country,” said Karthik Raghupathy, head of Strategy and Investor Relations at PhonePe. “It is going to be an exciting next quarter with the festivities and the holiday season, we are already looking forward to interesting insights and trends from Q4FY2021.”

 

Furthermore, the trend of digital payments becoming a Pan-India habit also continued, with 720 out of 726 districts in the country registering positive growth in digital transactions volume. This is also shown in the number of registered users which grew from 305 million to 328 million.

Geographically, Chandigarh topped the growth charts with over 50 per cent QoQ transaction volumes growth, while Karnataka and Maharashtra topped the charts in terms of increase in QoQ transactions volume with both registering an increase of 220 million.

Amongst the districts, Washim in Maharashtra saw the largest QoQ growth in transactions at over 75 per cent. Interestingly Washim has the most digital payments savvy users in the country, with a base of 230,000 PhonePe users driving over 47 million transactions in Q3 2021.

 

When it came to mobile devices, Xiaomi continued to be the most preferred with the highest number of devices in play, with about 25 per cent of the user base, with the next largest being VIVO with 20 per cent of the user base. However, an interesting trend this quarter is that PhonePe saw RealMe, OnePlus and VIVO grow faster than Xiaomi clocking in growth rates of 17.8 per cent, 17.0 per cent and 11.2 per cent relative to the 6.4 per cent clocked by Xiaomi.

PhonePe users using a Vivo device saw sharp growth this quarter. Vivo is now the second preferred device brand for PhonePe users, after Xiaomi, having displaced Samsung from the 2nd spot.

While households in Kerala buy the most gold overall in India (per NSSO surveys), on PhonePe, users from Karnataka buy the largest number of gold coins.

Over 30 per cent of digital payment users believe in a digital form of shagun. They tend to add Re 1 to the amount they send their contacts.

Q4 in India is all about festivals, and historically this time period also drives the highest value and volume of digital transactions in the country. “We believe the Q4 data will also be a strong indicator of how the economy has revived post the Covid induced lockdowns,” said the Pulse report. “The festive mood combined with holidays is expected to lead to growth in transactions, aided by more digitized merchants and a strong consumer preference to pay digitally.”