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UPI transaction value drops marginally

The withdrawal of incentive schemes to merchants and consumers on BHIM could have hit it hard, while other apps continued with these. (Representational image)

The value of transactions made using the Unified Payments Interface (UPI) channel fell marginally to Rs 1.89 lakh crore in November from the October value of Rs 1.91 lakh crore. Industry executives attributed the fall in transaction value to a spurt in spends during October, which coincided with the festive season this year.

UPI recorded 1.22 billion transactions in November, up from 1.15 billion in the previous month. According to data released by the National Payments Corporation of India (NPCI), its BHIM app was used for making 15.76 million transactions worth `5,853.5 crore. In other words, the app now contributes a mere 1.3% to UPI usage in volume terms.

The first mover in UPI payments has been losing share since mid-2017 to rival apps launched by large internet and e-commerce players, many of them multinationals.

The withdrawal of incentive schemes to merchants and consumers on BHIM could have hit it hard, while other apps continued with these.

PayNearby MD and CEO Anand Kumar Bajaj said with the festive month gone, the fall in the gross transaction value of UPI in November reflects the festive spurt.

“However, there has been a steady rise in the volume of transactions which clearly demonstrates the adoption of UPI services and rise in availing the platform,” he added.

Payment firms say they have been observing greater uptake of UPI in non-metro locations. Sarvatra Technologies founder and vice-chairman Mandar Agashe said, “We have noticed a 70% growth in UPI transactions during Diwali festivities, and it further cemented our belief that online payments are rapidly picking up in tier II and III cities, and are well on their way to surpass growth figures in urban areas as well.”

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Source: Financial Express