Digital payments growth buoyed by rise in acceptance channels, lower ticket size: Worldline

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The rapid growth in digital payments in India is being led by a robust increase in the payments acceptance infrastructure channels, according to a report by Worldline India which showed UPI QR codes grew 57 per cent from July 2022 to 31.7 crore as of December 2023, and Bharat QR codes grew 32 per cent to 59.6 lakh.

Point of Sale (PoS) terminals expanded 26 per cent between July 2022 and December 2023 to reach 85.6 lakh. Private sector banks dominated the space with a market share of 73 per cent, followed by PSU banks at 18 per cent. Payments banks had a share of 8 per cent, and foreign banks of 1 per cent. Axis Bank, ICICI Bank, HDFC Bank, State Bank Of India, RBL Bank, Paytm Payments Bank, IndusInd Bank, Kotak Mahindra Bank, Yes Bank, and Canara Bank accounted for 94 per cent of terminals deployed.

UPI transactions grew 56 per cent yoy in terms of volume to 6,577 crore as of December 2023 whereas the value of transactions grew 44 per cent to Rs 99.68 lakh crore. The average ticket size continued its downward trend, declining 8 per cent to Rs 1,515, indicating more profound integration of UPI particularly in smaller or micro transactions led by a surge in person-to-merchant (P2M) transactions, as per Worldline’s India Digital Payments Report for H2 CY23.

Number of P2M transactions rose 77 per cent to 3,873 crore, processing payments worth ₹25.43 lakh crore, an increase of 62 per cent on year. In comparison, volume of P2P transactions surged 34 per cent to 2,704 crore and the amount of transactions was up 38 per cent at ₹74.24 lakh crore. The average ticket size for P2M transactions fell 9 per cent to ₹656, whereas for P2P payments it grew by 4 per cent on year to ₹2,745. 

In terms of volume and value, PhonePe, Google Pay and Paytm were the dominant UPI app players, accounting for 95.4 per cent of transaction volume and 93 per cent in terms of value. State Bank of India, HDFC Bank, Bank of Baroda, Union Bank and Punjab National Bank were top UPI remitter banks whereas Paytm Payments Bank, YES Bank, SBI, Axis Bank and ICICI Bank were top beneficiary banks.

“This trend underscores users’ growing confidence and familiarity with smartphone-based payment methods. The proliferation of Point of Sale terminals has reached unprecedented levels, concurrent with the ascendance of mobile payments as a dominant transaction avenue. This underscores the necessity for FinTechs to adjust to a diverse array of payment channels,” said Ramesh Narasimhan, India CEO, Worldline.

Volume of mobile transactions increased 38 per cent to 6,295 crore in H2 CY23 whereas the value of transactions rose 31 per cent to ₹152.33 lakh crore. Between January and December 2023, the volume of transactions was up 34 per cent whereas value was up 33 per cent. Here too, the average ticket size decreased by 5 per cent to ₹2,420.

The number of toll tags issued grew 45 per cent to 8.12 crore. The volume of transactions through FasTags were 13 per cent higher at 189 crore and the value was up 20 per cent to ₹31,948 crore.