UPI transactions value nearly doubles in FY22; sees a jump of 900% in 3 years—Here’s what's contributing to surge in digital payment transactions

Digital transactions have seen an unprecedented jump in the last few years amid promotion of digital payments by the government and wider acceptability among youth and working class for this payment method

From transactions worth Rs 9 lakh crore in FY 2018-19, the value jumped to Rs 81 lakh crore in FY 22 at the end of March 20, 2022

Digital transactions have seen an unprecedented jump in the last few years amid promotion of digital payments by the government and wider acceptability among youth and working class for this payment method. As per the Ministry of Electronics and IT (MeitY), digital payment transactions have witnessed a growth of 33% from Rs 5,554 Crores in FY 21 to Rs 7,422 Crores in FY 22.

What's more interesting is the growth of payments made through UPI. As per the Ministry of Electronics & IT provisional data, payments made through UPI in the country has almost doubled in one year. From transactions value of Rs 41 lakh crore in FY 2022-21 to Rs 81 land FY 2021-22, the UPI transactions value witnessed a jump of 97.5% in just one year.

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Furthermore, UPI transactions value grew 900% in the last three years. From transactions worth Rs 9 lakh crore in FY 2018-19, the value jumped to Rs 81 lakh crore in FY 22 at the end of March 20, 2022.

Digital adoption of payments means have increased due to no MDR on UPI etc, says Ram Shriram, CEO, Mahagram.

"Majority of the small-time merchants are P2P and since they are getting their money directly in the bank account linked to the UPI qr on real-time basis, unlike the other payment means such as credit cards/debit card, pos etc, hence the surge in UPI transaction value," he said

Participation of Fintech and startups in penetrating the digital payments technologies and solving biggest ux issues in overall payment process has also helped consumers to stick around, says Mahagram CEO.

Total value of digital payments paid through UPI in the country during the last three years and current year:

Speaking of surge in digital payments in the past on year, Shriram says the biggest contributor for this growth has been COVID -19 induced lockdown, which taught and augmented the adoption of technology, fueling the proliferation of digital modes of payment propelling the country towards ‘less-cash’ alternatives.

“Inexpensive internet data, high Smartphone penetration and biometric linkage have further aided the digital payments. Further to that, a high impact on digital transactions was seen due to no MDR charges & taxation on digital transactions performed by the self-service tech-savvy digital customers,” says Shriram.

India is expecting to grow the value of digital payments three folds to touch down 1 trillion dollars by FY 2026. However, we would want the government to evaluate if they could waive off GST and TDS levied on the in-store agent-assisted financial services to the last mile of customers who are not so tech-savvy, Mahagram CEO says.

“Such steps by the government will help reduce the cost and pass on the benefits to the last mile customers, ensuring the highest level of financial inclusions in the 65% of rural India which we term as Bharat," he added.

Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision

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