Mumbai: As UPI-based digital payments surge, debit card-based transactions dropped almost 8 percent from nearly Rs 43,350 crore in August to about Rs 39,920 crore in September, according to the Reserve Bank of India’s monthly data. On the other hand, credit card transactions grew in the country, which saw a nearly 5 percent increase in September at Rs 1.76 lakh crore, from Rs 1.
68 lakh crore in August, according to the latest data from the central bank. As per market experts, the growth in credit card spending is driven by a lower base in the previous year and the festival season as there has been an uptick in promotional schemes like equated monthly installments during the festival season. According to the latest paper by economist Pradip Bhuyan from the Reserve Bank’s Department of Currency Management, digital transactions have surged in such a fashion in India that cash usage, which still accounts for 60 percent of consumer expenditure (as of March 2024) is rapidly declining.
The share of digital payments more than doubled from 14-19 percent in March 2021 to 40-48 percent in March 2024, with unified payments interface (UPI) playing a key role. According to the RBI paper, in recent years, significant growth has been observed in retail digital payments (RDP), which is the total digital payments except for payments through real-time gross settlement. Launched in 2016, UPI accounted for the highest share of RDP in volume in the last five years.
UPI-based transaction volume.