The value of Unified Payments Interface (UPI) transactions in financial year 2018-19 may have jumped eight times at ₹8.76-lakh crore from ₹1.09-lakh crore in FY18, but it has a long way to go to overtake the number of card transactions in India.

Value-card transactions, including debit and credit cards, for the first three months of calendar year 2019, stood at a whopping ₹11.2-lakh crore, or about 3.2 times that of UPI transactions for the same period, according to data sourced from the websites of the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), the owner and creator of UPI.

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Card payments to rise

According to a report by Worldline India, a payment and transaction service player, card-payment instruments still remain the most preferred option among consumers because of the ingrained behaviour of consumers to paythrough credit or debit cards. The report added that card issuance will see an uptick with the rise of several metro and smart-city projects.

Besides, the National Common Mobility Cards (NCMC) solution has the potential to digitalise transit payment solutions for bus, metro, cab, train and other normal day-to-day retail payments. In addition to this, payments banks and aggregators are also set to introduce credit cards to a new all-digital consumer base.

For example, Paytm, in partnership with Citibank, has launched credit cards, and other wallets might soon follow suit. However, UPI has been making a significant improvement in its value of transactions year-on-year on the back of growth in smartphones, increase in penetration of cheaper data, and adoption of UPI by both banks and fintech players such as Paytm, PhonePe and Google Pay. In April this year, UPI transactions stood at ₹1.4-lakh crore, which is higher than the value of transactions it carried out for the whole of FY18. UPI, a unique system invented by Government-backed NPCI, includes the transactions of BHIM and USSD.

While BHIM transactions have increased substantially, USSD, a text-based mobile banking service, has been neglible at ₹18.6 crore in April and remained flat for the last three months.

However, BHIM has been lagging behind private players such as Paytm, PhonePe and Google Pay.

It clocked 1.3 crore transactions in January, compared to Paytm’s 22.1 crore volume in the same period.

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