In September, the number of transactions made through Unified Payments Interface (UPI) has surpassed transactions done through mobile wallets for the first time this September. This information was released by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI).
During the month of September, UPI users conducted over 406 million transactions worth Rs.59,835 crore, while mobile wallet transactions recorded during this period were 324 million worth Rs.15,102 crore. This is a 165% growth in UPI transactions compared to the 151 million transactions recorded at the beginning of this year. The number of mobile wallet transactions recorded in January 2018 was 326 million.
Most of the transactions that happen through UPI and mobile wallets are peer-to-peer transactions. The major shift from mobile wallets to UPI can be attributed to the strict KYC norms imposed by mobile wallet companies. Moreover, these wallets also impose service tax on transactions done by business correspondents.
With UPI, customers can even verify the details of the merchant through invoice before transferring the money to them. This security feature is considered to be a major factor that has caused a shift towards UPI transactions.
The NPCI launched UPI in August 2016 as a new real-time instant payment system. This system was designed to conduct bank account to bank account transactions between two users with the help of just their phone numbers. This allows seamless transactions between two parties once the payment amount and other details are verified by the user.
Source: Financial Express