The pandemic sent waves across the digital payments sector, raising it to great heights before pulling it down again. After the second wave of the pandemic disrupted business once again, the digital payments industry made a strong comeback from a consistent decline during the second wave to clock no less than 2.8 billion transactions with a worth of ₹5,47,373 crores on the United Payments Interface (UPI) platforms in June, its all-time highest, according to data released by the National Payments Corporation of India (NPCI).
During the second wave, the digital payments sector saw a consistent decline in business, but the new high in June, an increase of 10.6% in volume and 11.56% in value, has made up for it. April 2021 saw the total count came up to 2.64 billion transactions at a worth of around ₹4,93,633 crores, while the numbers slightly increased in May to around 2.53 billion transactions with a worth of ₹ 4,90,638 crores amidst the ease of restrictions and lockdowns across the country.
The previous highest figures for UPI were in March, with 2.73 billion transactions worth ₹5,04,886.44 crores. The fall in transaction volume for UPI was not unexpected as businesses had to shut down owing to the lockdowns and restrictions, but things started to improved as June witnessed the easing of the restrictions.
Perhaps that is what makes the revival of the sector so significant, as it indicates not only the increasing traction for digital payments in India but a resurgence of business activity after the second wave and the lockdown. The growth of transactions is expected to sustain for the near future, and the dream of three million monthly UPI transactions (an average of 100 million daily) could soon become reality.
As for the other branches of NPCI such as Bharat Bill Payment System (BBPS), Aadhaar Enabled Payment System (AePS), National Electronic Toll Collection (NETC), and Immediate Payment Service (IMPS), they all witnessed a rise in activity and transactions.
BBPS payments transactions grew by 16% month-on-month at 45.47 million transactions, while NETC grew by 35.3% to 157 million. Activity on IMPS rose by 8% to come to 303.7 million while AePS rose marginally to 87.5 million for June. Fastag saw an even sharper growth of 35.34% to come to 157.86 million transactions at a value of ₹2576.28.
According to Anil Gupta, vice president, Sector Head, ICRA, “The drop in total digital payments during FY21 is attributable to slump in business activities due to challenges posed by COVID which led to economic contraction for several quarters. However, we see economic activities back on track this year with a rebound in GDP which will increase the payment transactions this financial year.”
NPCI did not disclose the data on the market share of third-party app providers, including PhonePe, Google Pay, and Paytm, the three players who dominate the UPI ecosystem, with market shares of 45.27%, 34.67%, and 11.44%, respectively.