Person-to-person (P2P) and person-to-merchant (P2M) transactions make up UPI transactions. These two categories have each shown strong development.
According to a report by international payments technology company Worldline, Unified Payments Interface (UPI) has continued to rule the Indian digital payments market, with transaction volume rising by an astounding 56% to 65.77 billion in the second half of 2023 from 42.09 billion in the same period the previous year.
Over the course of the year, the value of transactions increased from Rs 69.36 lakh crore to Rs 99.68 lakh crore, a 44% increase.
The average ticket size (ATS), which decreased by 8% to Rs 1,515 in the second half of 2023 from Rs 1,648 in the same period of 2022, is still an intriguing figure.
The research stated that the increase in person-to-merchant (P2M) transactions is the main cause of the ATS’s secular slide, which points to a deeper embedding of UPI. The ATS is utilized for smaller or microtransactions.
P2M and P2P Exchanges
Person-to-person (P2P) and person-to-merchant (P2M) transactions make up UPI transactions. These two categories have each shown strong development.
From 20.25 billion in H2 2022 to 27.04 billion in the aforementioned six months, P2P transactions increased by 34% year over year. P2P transactions increased in value from Rs 53.69 trillion to Rs 74.24 trillion in a year, a 38% annual growth.
P2M transactions increased in volume by 77% from 21.84 billion in the same six months of 2022 to 38.73 billion in the January–June period of 2023. P2M transaction value increased 62% year over year from Rs 15.66 lakh crore in the second half of 2022 to Rs 25.43 lakh crore in the second half of 2023.
Typical Size of Ticket
Compared to Rs 1,648 in H2 2022, the average ticket size (ATS) of all UPI transactions decreased by 8% to Rs 1,515 in the second half of 2023. The ATS showed a 4% YoY rise for P2P transactions, with a value of Rs 2,745 compared to Rs 2,649. The ATS for P2M transactions saw a 9% decline throughout that time, falling from Rs 720 to Rs 656.
According to the Worldline study, it is evident that the decline in overall Average Transaction Size (ATS) has been influenced by Peer-to-Merchant (P2M) transactions, marking a positive trend as they represent the future of UPI.
Best UPI applications, Beneficiary Banks, and Remitters
Three applications were the main UPI app players in terms of volume and value: Paytm, Google Pay, and PhonePe. In terms of volume, these three accounted for 95.4% of all transactions in December 2023, up from 94.8% in the same month the previous year. Together, these three applications accounted for 93% of the value in December 2023, up from 92.2% in the same month the previous year.
The Top 5 Banks Taking Part in UPI Transactions as Remitters and Beneficiaries
State Bank of India, HDFC Bank, Bank of Baroda, Union Bank of India, and Punjab National Bank were the top five remitter banks as of December 2023.
Conversely, Paytm Payments Bank, Yes Bank, SBI, Axis Bank, and ICICI Bank were the top five benefit banks. It is important to remember that this study covers H2 2023, before to the Reserve Bank’s decision on Paytm Payments Bank.