As the launch of United Payments Interface (UPI) 2.0 is nearing, transactions by its previous version fell by 4 per cent till July. This is the biggest drop in volume since its introduction.
The volume of transactions for July stood at 235.65 million against 246.37 million in June. The value of UPI transactions grew by 12 per cent to Rs 458 billion.
UPI has seen growth in volume and value over the previous month, barring a marginal fall in volume in October 2016, May and July 2018. This growth sped up as wallets struggled to comply with Know-your-customer norms since October 2017. However, the following months saw wallets a bounce back by offering various cashbacks and partnering with retail and other outlets.
Majority of UPI volume comes from peer to peer (P2P) transactions. The National Payments Corporation of India will block payment transfers within the same account from August 1. People transferring money to themselves to earn cash backs would be eliminated from the count, the following months could also see a drop in volume.
UPI 2.0 is expected to win more traction of merchant-based transactions and make up for the fall in P2P transactions.
