UPI transaction completes Rs 2 lakh crore mark in December 2019
The value of transactions made using the Unified Payments Interface (UPI) channel crossed Rs 2 lakh crore in December after falling marginally month-on-month in November. The UPI recorded 1.3 billion transactions in December worth Rs 2.02 lakh crore, up from 1.22 billion transactions worth Rs 1.89 lakh crore in the previous month.
According to data released by the National Payments Corporation of India (NPCI), its Bharat Interface for Money (BHIM) app was used for making 17.82 million transactions worth Rs 6,316.37 crore. In other words, the app now contributes a mere 1.37% 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.
Effective January 1, merchants will no longer have to shell out merchant discount rate (MDR) charges for accepting UPI payments. The move by the government is aimed at pushing greater adoption of the payments channel by smaller merchants.
At the same time, industry watchers feel the recent move to waive charges on National Electronic Fund Transfer (NEFT) transactions may end up deplete UPI transactions to quite some mark. At least 70% of UPI volumes comprised peer-to-peer (P2P) transactions and there could be a significant overlap between UPI users and NEFT users.
Moreover, a two-year MDR subsidy that the government was offering for merchant transactions of up to Rs 2,000 expired on January 1. This, too, could lead to some merchants earlier using UPI falling off the network.
(Source: Financial Express)
