UPI transactions at retail stores up 118%, cash collections up 65% in 2023

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Unified Payments Interface (UPI) transactions at semi-urban and rural retail stores surged 118 per cent in terms of volume and 106 per cent in value terms, reflecting growing adoption of UPI beyond tier-II regions, according to a report by PayNearby.

mPOS (Mobile point-of-sale) acceptance too witnessed a growth of 5 per cent in value, emphasising increasing adoption of cutting-edge technology among small merchants, the data report titled ‘Retail-O-Nomics’ said.

PayNearby is the country’s largest branchless banking and digital network platform. In its third edition, the report covered transactions across over 10 lakh retail touchpoints, consisting of kirana stores, mobile recharge stores, medical shops, customer service points (CSPs), travel agents, etc. throughout the country.

The report highlighted a 65 per cent surge in cash collection at retail counters, reflecting soaring demand for credit and financial solutions, with average monthly collection of ₹1,700 crore. Credit demand was robust, reflected in the 25 per cent surge in EMI collections for NBFCs, MFIs, and small finance banks.

Also read: UPI transaction limit for medical, educational services to be hiked to ₹5 lakh

Business, personal, and gold loans gained rapid traction, surpassing 10 lakh disbursements during the year. Of this, 21 per cent applicants were new to credit (NTC) and the average age was 28-30 years.

EMI collections

“This uptick in EMI collections signifies a rising awareness and interest in credit and financial offerings at the grassroots level. Additionally, positive growth in subscriptions for OTTs, online education, and online gaming underlines a latent demand for digital services, indicating Bharat’s growing affinity towards digital products,” the report said adding that there is an urgent need for scalable, affordable credit solutions catering to SMEs’ working capital and individual lifestyle upgrades.

The number of new registered digital retailers increased by 9 per cent, leading to 10 per cent rise in transactions both in terms of volume and value. In addition to banking and financial services, these transactions included digital services such as utility payment, cash collection, credit, insurance and assisted commerce, among others.

Retail counters opened 1.75 lakh new current and savings accounts, with a 202 per cent growth in account balances compared with last year. Insurance policy purchases and premium collections rose 150 per cent in terms of transaction volume and 140 per cent in terms of new customer adoption.

Also read: Fintechs bet big on credit line on UPI for growth

Micro ATM and AePS cash withdrawals rose 17 per cent in terms of value of purchases. However, the transaction volume decreased, even as the average cash withdrawal per transaction grew slightly from ₹2,595 in 2022 to ₹2,624 in 2023.

“Notably, AePS withdrawals surged consistently by 30-40 per cent during DBT (direct benefit transfer) releases, notably during PM Kisan Yojana credits, compared with the rest of the year,” the report said.