Consumers show faith in UPI, transactions surge by 56%, modest growth of 6% in card transactions

Mumbai (Maharashtra) [India], April 3 : The latest report from Worldline has unveiled divergences in the trajectories of digital transactions in India. While UPI transactions have surged by 56 per cent year-on-year (YoY) in H2 2023, card transactions saw a modest growth of 6 per cent.
Startling revelations have emerged regarding the digital payments landscape in India for the latter half of 2023 (H2 2023).
According to the report, the volume of UPI transactions surged to 65.77 billion from 42.09 billion in H2 2022. Transaction value saw a phenomenal 44 per cent increase, from RS 69.36 trillion to RS 99.68 trillion during the same period.
Commenting on this trend, Ramesh Narasimhan, Chief Executive Officer - India, Worldline, says, "The year 2023 witnessed significant milestones in the payments ecosystem. UPI maintains its position as the uncontested frontrunner, buoyed by substantial expansion in mobile transactions."
He added, "This trend underscores users' growing confidence and familiarity with smartphone-based payment methods. The proliferation of Point of Sale terminals has reached unprecedented levels, concurrent with the ascendance of mobile payments as a dominant transaction avenue. This underscores the necessity for FinTechs to adjust to a diverse array of payment channels".
However, te average ticket size (ATS) for UPI transactions, experienced an 8 per cent decline from Rs1648 to Rs1515.
This downward trend in ATS suggests the increasing integration of UPI in smaller transactions, particularly person-to-merchant (P2M) transactions, reflecting the evolving preferences of consumers towards digital payment methods.
The report also says that payment acceptance infrastructure has also gone up substantially, with Point of Sale (PoS) terminals at 8.56 million, a notable 26 per cent increase.
Bharat QR (BQR) and UPI also experienced significant growth, underscoring the proliferation of digital payment options.
Both person-to-person (P2P) and person-to-merchant (P2M) transactions exhibited robust growth.
P2M transactions, in particular, witnessed a remarkable 77 per cent increase in volume and a 62 per cent increase in value YoY, indicating a shifting consumer behaviour towards digital payments for commercial transactions.
However, the ATS for UPI transactions saw a decline, P2P transactions witnessed a 4 per cent YoY growth in ATS, while P2M transactions experienced a 9 per cent decrease. This suggests that the reduction in overall ATS is primarily driven by a drop in P2M transactions, aligning with the evolving dynamics of digital commerce.
In contrast to the exponential growth of UPI transactions, card transactions recorded a modest 6 per cent YoY growth, with the total number of cards reaching 1.384 billion in H2 2023.
While credit cards witnessed a substantial 21 per cent YoY growth, debit cards experienced a marginal 2 per cent growth, reflecting a nuanced consumer preference for different payment instruments.
Electronic Toll Collection (ETC) has brought a significant transformation in how toll payments are made across the country's roadways, expanding its reach to encompass parking facilities and various other applications.
The convenience it offers, drives nationwide has become evident, reflected in the consistent adoption of this technology. The issuance of tags has seen substantial growth, escalating from 55.94 million in July 2022 to 81.24 million by December 2023, marking a remarkable 45 per cent increase.
In terms of transaction volume, the latter half of 2023 witnessed 1.89 billion transactions, compared to 1.67 billion in the corresponding period of 2022, representing a 13 per cent growth.
Additionally, the value of ETC transactions in the latter half of 2023 amounted to Rs 319.48 billion, marking a significant 20 per cent increase from the previous year's figure of Rs 267 billion.
This underscores the growing adoption of digital payment solutions across various sectors.
The report underscores the pivotal role of UPI in driving the digital payments revolution in India, while also highlighting the evolving landscape of payment acceptance infrastructure and consumer preferences.
As digital payments continue to gain traction, stakeholders must adapt to these shifting dynamics to capitalize on emerging opportunities in the digital economy.