Transaction in UPI, IMPS, Bharat Bill sees slowdown in growth rate

The growth rate in major digital payment platforms slowed in January 2023, as per the latest data from RBI.

Growth in transactions of UPI, IMPS, and BBPS came in at a slower pace in both volume and value terms on year-on-year basis.

However, NEFT outperformed its counterparts. Despite the decline, RBI believes the user penetration rate of digital payments in India is likely to exceed that of the world.

In the February 2023 bulletin, RBI's data showed that the growth rate in Unified Payments Interface (UPI) transactions in volume terms stood at 74.1% year-on-year in January 2023 compared to the growth rate of 100.5% witnessed in January 2022.

Also, the growth in UPI transactions in value terms came in at 56.1% YoY in January this year, compared to the growth of 93% last year same month.

Further, the Immediate Payment Service (IMPS) recorded a single-digit growth in volumes at 7.8% in January 2023 versus 27% growth in the same month a year ago. In value terms, the growth was at 23.4% in January 2023 as against the growth rate of 34.1% a year ago same month.

The growth rate in Bharat Bill Payment System (BBPS) more than halved to 59.8% in January 2023 in volumes as against the growth of 130.2% in January 2022.

Also, month-on-month, the growth rate is lower as against 60.4% in December 2022.

In value terms, BBPS' growth rate stood at 66.6% in January 2023 as against the growth rate of a whopping 148.8% in January last year.

In December 2022, NEFT transactions posted a growth of 29% in volumes and 9.4% in value.

Meanwhile, RTGS transactions showed a mixed picture. In volume terms, the growth has slowed to 12.6% in January 2023 as against 15.7% in January 2022. In value terms, the growth is 20.1% in January of the current year as against a growth of 13.9% in the same month a year ago.

On supply-side, RBI's bulletin stated that the number of payment acceptance devices deployed under the Payment Infrastructure Development Fund (PIDF) Scheme expanded by 59% from April-December 2022.

Also, as a testament to growing digital adoption, the recently released Reserve Bank’s Digital Payments Index (RBI-DPI) showed a growth (y-o-y) of 24.1% in September 2022.

Going ahead in 2023, RBI's bulletin said, "the user penetration rate of digital payments in India is expected to exceed that of the world."

During the monetary policy announcement on February 8th, 2023, RBI proposed key measures to expand the scope of activity on the Trade Receivables Discounting System (TReDS) by allowing the participation of insurance companies and agencies undertaking factoring business, and enabling secondary market operations on the TReDS platforms. It also proposed an extension of the UPI (for merchant payments) for all inbound travellers to India while they are in the country.

Additionally, the National Payments Corporation of India (NPCI) has enabled the onboarding of non-resident Indians from 10 countries on the UPI platform.