When India’s UPI (Unified Payments Interface) crossed a billion transactions in Februrary (1.33 billion to be precise), no one really thought the feat will be achieved again, at least in the near future. That was largely because of two primary reasons. One, the banking crisis that engulfed Yes Bank which processes more UPI transactions than any other bank in the country. And two, the coronavirus grip that resulted in a complete national lockdown.
However, it seems none of those really had any major impact on the statistics for UPI. The payments platform crossed the billion transactions mark yet again, this time recording a slightly lower but still impressive, 1.25 billion transactions. And even though that is a 6% decline over last month’s volume, it is still impressive considering the factors that could have brought this even further down.
In terms of the amount transacted, the figure stood at 2,06,462 crore or 2.06 trillion (~$26 billion) in March. This too is slightly on the lower end when compared with figures for February, which stood at Rs 2,22,517 crore or Rs 2.22 trillion.
However, experts predict that there could be sharp decline in those numbers in April. One of the prime reasons behind the same, is introduction of UPI transaction fee that came into effect from April 1 by some of India’s biggest private sector banks. Kotak Bank for example, will start charging upto Rs. 5 per transaction after first 20 free P2P transactions. What needs to be noted though, that the fee will not be applicable to merchant transactions and will only apply to peer to peer transactions.
Another reason is the fact that almost 2/3rd of the lockdown time (2 weeks) will fall under the month of April. Since almost all of the hospitality and travel sector is under a shut down, expect the transactions to register some sizeable fall.