UPI the major driving force behind digital transaction - PayU Insights
PayU, India’s biggest online payments processor, has seen huge progress in UPI-based transactions in the last six months starting from September 2017 until March 2018. PayU Insights have been derived basis it’s 3,00,000+ vast merchant network including 90% of the e-commerce players in the country. It conducts transactions worth INR 8000 crores per month. This also makes PayU the biggest deployer in UPI payments. PayU had enabled UPI on its platform across its merchant offerings in August 2017.
According to PayU insights, UPI which is already changing the P2P (Peer to Peer) payments space has also seen immense popularity in the P2M (Person to Merchant) payments, a segment which is PayU's core business. The insights also determine how sticky long-term usage will be as UPI aims to become the primary payment instrument for conducting commerce across the country.
PayU Insights indicate that wallet transactions have reduced to 22.13% in March 2018 from 74.52% in September 2017. One of the reasons leading to declining of wallets could be the mandatory KYC regulations that recently led to a lot of users discontinuing its usage. On the other hand, UPI has seen a tremendous increase of about 200% from 25.48% in September 2017 to 77.87% in March 2018 on transactions processed through PayU.
PayU transactions trends showcase that UPI has fared well not just in comparison to wallets but other modes of payments such as debit and credit cards. The UPI initiative, backed by the Government of India, has dominated the digital payments space across verticals and has witnessed a massive rise in transaction volumes.
Of the overall transactions processed through PayU’s platform, UPI has seen growth in volume and size of transactions as compared to the other payment options. The increase in average transaction size, using cards, both credit, and debit, have been marginal by 19% and 11% respectively, whereas UPI has enjoyed a considerable increase by 188% on the PayU gateway. In fact, wallets’ average transaction size grew by only 41%. The growing popularity of UPI could be attributed to the fact UPI players offer lucrative cashback to incentivize customers which could be a vital reason for UPI’s growing popularity.
Commenting on the findings of the insights, B. Amrish Rau, CEO at PayU India said “UPI has come as a boon for ease of transactions for the consumers of India. It has greatly affected the transaction volumes of other payment options on the PayU payment gateway. Consumers now want money to move as quickly as sending a message and UPI is the key to it”
Among all the players in the market offering UPI services, BHIM, Tez, and PhonePe have emerged as the dominant ones. Tez has been able to massively increase its share of PayU transactions over time by increasing from a mere 6.86% in September 2017 to 44.92% in March 2018, making it the leading player in the UPI space. However, BHIM which was the top platform in September 2017 has now decreased its share to just 21% from the initial 41.20%.
As per PayU insights, consumers prefer to use UPI mode of payment while shopping on e-commerce sites. Of the total UPI transactions processed through PayU, 72.43% comes from e-commerce sites followed by professional technical services and education which have close to 9% and 5% share respectively.
