Virendra Pandit
New Delhi: India’s financial miracle, the Unified Payments Interface (UPI), being followed by around 50 countries worldwide, is unstoppable within the nation as well. It is not only a predominant mode of payment in cities and towns, but it has also percolated to semi-urban and rural areas, making it the driving force in the overall growth of digital payments.
The UPI transactions at retail stores in rural and semi-urban India rose 118 percent in 2023 as compared to the year before, marking the increasing adoption of online payments in Tier-II cities. By value, the transactions were up 106 percent, according to a study.
The general acceptance of Mobile Point of Sale (mPOS) increased 5 percent in 2023, according to the report titled ‘Retail-O-Nomics’ by fintech firm PayNearby, which surveyed more than a million shops between January and November 2023.
“The (UPI) transactions include not only banking and financial services, but also digital services like utility payment, cash collection, credit, insurance, assisted commerce and more, indicating a significant behavioral shift among consumers in these regions towards assisted digital methods for their banking and lifestyle needs, contributing to their integration into the formal economy,” it said.
The government has also said so.
On Monday, for example, it informed Parliament that the number of UPI transactions had increased from 92 crore in 2017-18 to 8,375 crore in 2022-23 at a Compound Annual Growth Rate (CAGR) of 147 percent in terms of volume.
Union Minister of State for Finance Bhagwat K Karad informed the Lok Sabha that because of the UPI revolution, the banknote circulation fell 7.8 percent in 2022-23. The UPI achieved 85.72 billion transactions during the current financial year 2023-24, until December 11, 2023.
“The UPI has been the major driving force in the overall growth of digital payment transactions in the country accounting for 62 percent of digital payment transactions in 2022-23. The Year-on-Year growth in the value of banknotes in circulation has decreased from 9.9 percent in 2021-22 to 7.8 percent in 2022-23,” Karad added in a written reply.