UPI effect: Average ATM visits halve to 8 times a year

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Every $1 increase in the value of UPI (Unified Payments Interface) transactions leads to an 18 baisa decrease in debit card transactions, indicating that a person now visits an ATM an average of 8 times a year, down from 16 previous visits, according to the research report. Economic Bank of India “Ecowrap”.

The above note is based on the analysis of monthly time series data for the period from April 2016 to April 2023.

cash withdrawal

Research by SBI’s Economic Research Division (ERD) found that cash withdrawals through debit cards at ATMs have declined since November 2018, resulting in a waiver of UPI.

“UPI has not only changed the payment landscape in India, but it has also significantly shifted the purpose of using currency hitherto as a speculative (trading) channel,” said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

ERD research indicates that rural and peri-urban areas now account for 60 percent of the share in UPI value/volume, dismantling the popular perception that metropolitan/urban areas are hotbeds of digital payment adoption and innovations.

The top 15 countries accounted for about 90 percent of its value/volume share.

Among all, UPI has emerged as India’s most popular and preferred payment method leading person-to-person (P2P) as well as person-to-merchant (P2M) transactions in India which accounts for around 73 percent of all digital payments per Ecowrap.

ERD analysis shows that UPI transaction volume has increased several times from Rs 1.8 crores in FY 2017 to Rs 8,375 crores in FY 23. UPI transaction volume has also increased significantly, from just Rs 6,947 crores to Rs 139 thousand crores during the same period. period, a jump of 2004 times.

Interestingly, the CIC (Currency in Circulation) fell to 12.4 percent of GDP in FY23, which is about the same level as in 2015-2016. CIC’s annual growth also declined to 7.9 percent in FY23 from 16.6 percent in FY21.