 "UPI continues to dominate digital payments thanks to wide use of QR codes")
India’s flagship payment platform – Unified Payments Interface (UPI) – continues to be the most dominant channel for digital payments in the country, driven by the proliferation of QR codes, which have jumped 56 per cent in the calendar year 2022
(January – December).
According to a Worldline India report on India’s digital payments, in 2022, UPI processed over 74 billion transactions, amounting to Rs 126 trillion. While the volume of transactions was up 70 per cent year-on-year (YoY), the value of transactions went up by 54 per cent during the same period. In FY23, UPI processed 84 billion transactions, amounting to Rs 139.09 trillion.
According to the report, the proliferation of QR codes drives UPI transactions – 237 million in December 2022 compared to 152 million in January 2022. As of December 2022, the total number of Bharat QRs was 4.96 million, while UPI QR stood at 237.94 million, registering an increase of 65 per cent compared to December 2021.
According to the data, in 2022, 54 per cent of UPI transactions by volume were P2M (merchant transactions) by the end of 2022, whereas in value terms, it was 23 per cent. Overall, UPI Person-to-Merchant (P2M) and Person-to-Person (P2P) are the most preferred payment modes among consumers, with a market share of 40 per cent and 44 per cent in terms of transaction volume (UPI was 84 per cent in total). However, in terms of value, UPI P2M accounted for 18 per cent share, whereas UPI P2P accounted for 66 per cent of digital transactions by value (UPI was 84 per cent in total).
Meanwhile, banks have increased the issuance of credit cards, taking the outstanding base of credit cards to 81.1 million as of December 2022, an increase of 18 per cent YoY. Similarly, outstanding debit cards increased by 0.2 per cent from 938 million to 939.4 million during the same period. The report said the total number of credit and debit cards in circulation by the end of 2022 was 1.02 billion.
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In terms of transactions, the volume and value of credit card transactions stood at 2.76 billion and Rs 13.12 trillion, respectively. While the number of credit card transactions at POS accounted for 1.47 billion, e-commerce was 1.29 billion. And, in value terms, consumers transacted Rs 5.1 trillion at POS and Rs 8.1 trillion on e-commerce transactions via credit cards in the calendar year 2022.
Credit card transactions in 2023 could get a further boost as the Reserve Bank of India (RBI) has allowed linking RuPay credit cards on the UPI network.
Having said that, debit card transactions have seen a steady decline through the year, which is likely an outcome of the increase in UPI transactions.