The report – “India Digital Payments Report for H1 2023” – released by global payments service provider Worldline, says the number of UPI transactions in India rose 62% in the first six months of 2023 compared to the same period last year, largely driven by P2M transactions. It cited data from the National Payments Corporation of India (NPCI).

It may be noted that currently, P2M accounts for a share of 56.1% of all UPI transactions.

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UPI transactions have jumped 47% in H1 2023 to Rs 83.17 trillion from Rs 56.59 trillion between January and June 2022, it highlighted.

Report further highlighted that out of 51.91 billion UPI transactions between January and June this year, 29.15 billion were P2M payments. This roughly translates to a share of 56.1%, while the rest is made up of 22.75 billion person-to-person (P2P) transactions.

Compared to a 41% increase in P2P transaction volume in H1 2023, P2M transactions have jumped 119%.

While some of this growth in P2M transactions can be attributed to zero transaction fees imposed on merchants, it indicates the depth of acceptance of this payment mechanism from both buyers and particularly the sellers,” the report said.

“Beyond low fees, merchants are also looking for security, and timely payments, among other things, and UPI delivers here. The other fact is that with the dominance of P2M transactions, UPI is going to become even more entrenched with the population and growth will continue at this rapid pace,” it added.

UPI’s average ticket size in the first six months of 2023 at Rs 1,604 was 10% lower than Rs 1,774 in the same period last year. When put in juxtaposition with the 62% jump in the number of UPI transactions, it shows that its penetration has improved and is now increasingly being used to make smaller payments.

The report highlighted that the key driver for this growth has been the near-ubiquitous acceptance of UPI for both personal and payment transactions from the user/buyer standpoint as well as high acceptance by merchants. Also, there has been greater penetration of UPI in rural India.

The report also mentioned that three apps – PhonePe, Google Pay, and Paytm – account for 95.68% of all UPI transactions in India by volume. By value, they make up for 93.65% of all transactions, as of June 30.

The share of PhonePe in the total market, in terms of volume, has remained stable, rising from 45.8% in June 2022 to 47.2% in June 2023. In terms of value, its market share has risen from 48.8% to 49.8%.

Google Pay’s market share in the number of UPI transactions fell from 34% to 13.8%. At the same time, Paytm’s share rose from 14.7% to 34.6%.