Digital payments channels: UPI is fastest growing in October; IMPS follows

Published On: 12, Dec 2017 | Source:

Most modes of retail digital payments grew in volumes between September and October, with the Unstructured Supplementary Service Data (USSD) channel being the only laggard, data released by the Reserve Bank of India (RBI) showed. In continuance of a trend from the previous month, the Unified Payments Interface (UPI) channel grew the fastest on a month-on-month (m-o-m) basis in October in terms of volume of transactions. While the volume rose 149% over September to 77 million, the value of transactions on the channel grew 33% to Rs 7,028 crore in October. It was followed by Immediate Payment Service (IMPS) transactions, which rose 6.4% m-o-m to 88 million and the aggregate transaction value rose 4.6% to Rs 75,042 crore. The volume of credit and debit card transactions at point-of-sale (PoS) machines rose 3% over the September level in volume terms to 389 million, while the value of transactions rose 12% to Rs 82,088 crore. The relatively high growth in transaction value can be attributed to the impact of the festive season, when consumer spends typically spike.

PPIs, comprised mainly of mobile wallets and prepaid cards, saw a transaction volume of 245 million in October, up 2% from the September figure of 245 million. The value of transactions rose 6.6% m-o-m to Rs 11,698 crore. This puts the average ticket size of a wallet transaction at about Rs 477, higher than Rs 457 in September. The volume of National Electronic Fund Transfer (NEFT) transactions rose a mere 0.7% m-o-m to 158.78 million in September, while the value of transactions fell 2.3% to Rs 13.85 lakh crore between September and October.

The volume of transactions made over the USSD channel fell 10% m-o-m to 0.18 million and the total value of transactions dropped 7.6% to about Rs 30 crore. The use of USSD, an SMS-based money transfer service, had been on a decline in the first few months of 2017, as cash came back into the system and the usage of the Bharat Interface for Money (BHIM) app took off. BHIM is available for use on feature phones and, as such, competes directly with the USSD service.