Digital payments through the Unified Payments Interface (UPI) grew 3% in June, with 754.5 million transactions against 733.5 million in May, jumping back to growth track after a blip, although it was still lower than the nearly 800 million transactions recorded in March.
UPI transactions could have plateaued after almost two years of constant growth, when it rode on strong customer adoption driven by consumer-facing payment apps like Google Pay, Paytm, PhonePe and others, industry experts pointed out.
“UPI transactions might not show those animal spirits (of growth) over the next couple of months because a large chunk of the incentives for person to person paymentshas almost stopped for most of the prominent payment applications,” said a top executive of a digital payments company. “Now, the push is towards payments made at merchant outlets that need to move away from cash to UPI.”
The amount transferred in June fell slightly to Rs 1.4 lakh crore, from Rs 1.5 lakh crore in May.
Besides UPI, the number of transactions reported for National Electronic Toll Collection (NETC) stood at 26.6 million in June, down slightly from 27 million in the previous month.
The number of tags issued for vehicles has gone up to 52 lakh, more than double the number in June last year when the number of tags issued was 23 lakh.
The number of transactions under the Immediate Payment Service (IMPS), another interbank fund transfer mechanism, slipped to 171 million, from 183 million in May and 185 million in April.
The adoption of digital payments in India is improving, but the growth momentum has definitely slowed.
As WhatsApp prepares to enter the person-to-person payments space, customers could get more incentives in the next few months, industry experts said. It could also boost the total number of unique UPI users in the country.
The total number of unique users on UPI could be in the range of 70 to 80 million, as per industry estimates, although the government does not officially share these numbers.
In terms of volume, Google Pay dominated the total digital payments space as of last month.