The flagship digital transaction tool rolled out by the Reserve Bank of India, Unified Payments Interface, may have witnessed rise in payments over the last couple of months. However, it has been short by 35% for its quarterly goal as banks are not endorsing the product.
The amount of transactions below UPI was almost 26 Million in the quarter one of the financial year, short of the 40 Million objective targeted by the finance ministry. This data was obtained by the sources from the National Payments Corp. of India (NPCI). NPCI handles the payment railroad in the country. Payment railroad is utilized to define the pathways via which digital transactions are made. This same pathway is handled by NPCI in the case of UPI.
If payments do not pace in the coming couple of months and the banks do not promote the product, there is a real jeopardy that the yearly target of the government will be missed by a huge margin.
“Contribution of UPI in the entire target of 25 Billion payments arranged by the finance ministry is 400 Million,” said Managing Director of NPCI, AP Hota. “The quarter one target is missed by us, but with huge number of companies joining UPI, I think we will be able to conquer it over the coming couple of months.”
General digital payments, which in many cases increased 2 times post demonetization, has corrected and is anticipated to achieve a new standard of almost 30–40% growth over payment volumes in 2016. While there has been a sharp decline in transactions carried through mobile wallets, UPI and debit cards have grown consistently.
The Prime Minister of India, Narendra Modi’s government is assertively marketing new initiatives such as BHIM app and digital payments. It has also simplified the taxes on most of the digital payments.
“Apart from obtaining users, we have also focused on allowing our key vendor partners to agree to UPI-based transactions. We have on-boarded huge vendors such as IRCTC, Life Insurance Corporation of India, Big Bazaar, Reliance Digital, Ola, and PVR among others, for UPI transactions,” said Head of payments and cards business at Axis Bank, Sangram Singh. Axis Bank has allowed almost 600 vendors to agree to payments via UPI.
A huge chunk of the payments is taking place via BHIM, which has a 45% contribution and more 40% payments are arriving from PhonePe, the transactions arm of ecommerce giant Flipkart, claimed Hota in a statement to the media.