India has come closer to turn into a less cash reliant economy since the dispatch of UPI, which is becoming one of the fastest payment modes to bring financial inclusion.<\/p>\n
At Razorpay, we have been doing a detailed study to understand how UPI has transformed the Indian payments scene since 2017.<\/p>\n
UPI, which contributed 2 percent of our payment volumes less than a year ago, is now contributing around 20 percent.\u00a0<\/strong><\/p>\n I believe the only reason the UPI adoption has increased tremendously is that it\u2019s one of the only instruments in the country today built with mobile-first design and approach.<\/p>\n In our recent report\u00a0The Era of Rising Fintech<\/strong><\/a>, we highlighted how India makes and accepts payments. UPI has now made its way to steal the market share from net banking from being just a wallet killer.<\/p>\n It has also evolved itself into a preferred merchant first payment (P2M) platform, from being just a P2P payment mode in 2017.<\/p>\n Let\u2019s deep dive into how payments were carried out in April 2019, shall we?<\/p>\n To provide more context, let\u2019s talk about the different types of UPI payments. Transactions made through UPI are of two types.<\/p>\n We\u2019re sure you\u2019ve won some money on Google Pay, received cashbacks on PhonePe, and got many benefits from PayTM. Have you ever wondered why they\u2019re giving away goodies for free? To push adoption, of course!<\/p>\n Most UPI apps gave their users attractive incentives like discounts, scratchcards, and cashbacks, and we saw users referring their friends and family members to these apps. It\u2019s easy to \u2018game\u2019 incentives in P2P payments, and that\u2019s why we believe P2M payments are a better reflection of UPI usage trends because there is an intent to purchase something along with the payment.<\/p><\/blockquote>\n Since Razorpay is a payments platform, we mostly observe P2M transactions from a wide merchant-base, from many areas like IRCTC, Airtel, and BookMyShow, among 200,000 other businesses.<\/em> So, let\u2019s look at some numbers from our platform.<\/p>\n Before starting, we do not claim to represent the entirety of available data, but as one of the largest processors of UPI payments in India, we do have a considerable amount of visibility.<\/p>\n We pooled in data based on all transactions that were made across payment modes through Razorpay and analyzed the Average Ticket Value (ATV). Here\u2019s what we found out.<\/p>\n EMI payments add to the Average Ticket Value<\/strong> by the biggest, although bank transfers have been the preferred way to go for most.<\/p>\n Consumers still pick [what kind] payments, EMI, cardless EMI<\/a>, and netbanking over wallets and UPI to deal with high-value amounts.<\/p>\n UPI and wallets take a backseat as consumers mostly use these methods to transact smaller amounts of money (Rs 500 to Rs 1,000).<\/p>\n While there\u2019s been an increase in the number of UPI transactions, the decrease in ATV is because the consumers are increasingly opting for EMI\/ netbanking methods to make transactions of a larger value.<\/p>\n With so many UPI apps out there, the battle among them simply keeps getting interesting.<\/p>\n Google Pay\u00a0<\/strong>maintained the top position\u00a0<\/strong>with a contribution of\u00a052 percent<\/strong>\u00a0of total transactions.<\/p>\n We also believe that Google Pay will most likely continue to go strong for many months to come.<\/p>\n PhonePe<\/strong>\u00a0took the second position with\u00a028 percent<\/strong>\u00a0while\u00a0BHIM<\/strong>\u00a0app took third with\u00a09 percent<\/strong>, pushing PayTM further down the list. There was almost no handout from bank UPI providers, while ICICI did contribute a little.<\/p>\n In April, of the total UPI transactions on Razorpay,\u00a064 percent<\/strong>\u00a0came from Tier-I cities, going up from 58 percent in January, while Tier-II and III contributed\u00a036 percent<\/strong> of the total transactions, going down from 42 percent.<\/p>\n Suggested reading: The UPI wars – Who’s the Boss?<\/a><\/p>\n UPI has been growing over the last two years and tremendously more since the last financial year.<\/p>\n To learn more,\u00a0<\/strong>let\u2019s compare transaction data from April 2018 and April 2019 and draw a parallel between UPI and netbanking.<\/p>\n We\u2019re sure the results will surprise you!<\/p>\n We saw a whopping\u00a020x growth<\/strong>\u00a0in UPI transactions from April 2018 to April 2019, while netbanking grew only by 4x.<\/p>\n UPI, which was at\u00a012 percent<\/strong>\u00a0of the total digital transactions shot up to\u00a034 percent<\/strong>\u00a0in April 2019! And netbanking hit a low of\u00a012 percent<\/strong>\u00a0in April 2019, from\u00a018 percent<\/strong>\u00a0in April 2018.<\/p>\n We will also see an increase in the mobile payment<\/a> volume by tenfold by 2020 and believe 50 percent of internet users will begin to use digital payments<\/a> by 2022.<\/p>\n We\u2019re looking forward to the launch of UPI on WhatsApp in the next few months as it\u2019s expected to have a significant impact on digital payments, overall.<\/p>\n India is still at a nascent stage of digitizing the financial sector although we have scaled up significantly in the last couple of years.<\/p>\n UPI is that one mobile first fintech disruption that has the potential to transform how payments work in India, and we\u2019ve only seen the tip of the iceberg!<\/p>\n __________________<\/p>\nTypes of UPI Payments<\/strong><\/h2>\n
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Average Ticket Value (ATV): consumers are yet to open up to UPI for larger transactions<\/strong><\/h2>\n
![\"Growth](\"http:\/\/blog.razorpay.in\/wp-content\/uploads\/2019\/05\/No-snoozing-for-UPI-20x-growth-since-last-April.png\")
<\/p>\nUPI provider contribution in April 2019: Google Pay takes the prize, again!<\/strong><\/h2>\n
![\"UPI](\"http:\/\/blog.razorpay.in\/wp-content\/uploads\/2019\/05\/No-snoozing-for-UPI-20x-growth-since-last-April-.png\")
<\/p>\nThe elevation of UPI<\/strong><\/h2>\n
![\"UPI](\"http:\/\/blog.razorpay.in\/wp-content\/uploads\/2019\/05\/No-snoozing-for-UPI-20x-growth-since-last-April-1.png\")
<\/p>\nWhat\u2019s next?<\/strong><\/h2>\n
The upshot<\/strong><\/h2>\n