United Payments Interface (UPI) transactions at retail establishments in rural and semi-urban India increased 118% year on year in 2023, according to a report released on Wednesday, indicating the growing acceptance of online payments in Tier-II towns. The value of the transactions increased by 106%.
According to the analysis named 'Retail-O-Nomics' by fintech business PayNearby, acceptance of Mobile Point of Sale (mPOS) climbed 5% in 2023. It surveyed more than a million shops between January and November.
"The [UPI] transactions include not only banking and financial services, but also digital services like utility payment, cash collection, credit, insurance, assisted commerce and more, indicating a significant behavioral shift among consumers in these regions towards assisted digital methods for their banking and lifestyle needs, contributing to their integration into the formal economy," according to the report.
The administration told Parliament on December 18 that UPI is a driving force in the overall expansion of digital payments in India. In terms of volume, UPI transactions increased from 92 crore in 2017-18 to 8,375 crore in 2022-23, representing a Compound Annual Growth Rate (CAGR) of 147%.
According to the government, banknote circulation would fall 7.8 percent in 2022-23. During the current fiscal year, which runs until December 11, 2023, UPI has processed 85.72 billion transactions.
"UPI has been a major driving force in the country's overall growth of digital payment transactions, accounting for 62% of digital payment transactions in 2022-23." In a written response, Bhagwat K Karad, minister of state for finance, stated, "The year-on-year growth in the value of banknotes in circulation has decreased from 9.9 percent in 2021-22 to 7.8 percent in 2022-23."
