Digital India: UPI payments rebound to all-time high after sharp decline; IMPS, FASTag also soar

According to data by the NPCI, UPI and IMPS payments have rebounded sharply after their precipitous drop in April 2020.

National Payments Interface Corporation of India’s inter-bank transaction platform UPI has touched record high in June after a sharp decline in April amid coronavirus lockdown. “Daily payment data showed that daily average UPI (Unified Payments Interface) transaction value in June was at an all-time high,” a report by Kotak Institutional Equities said on Friday. Other digital payment methods such as IMPS and NETC FASTag transactions also witnessed a spurt when compared to May. However, week on week change in June has been negative for UPI and IMPS transaction values, the report added.

According to data by the NPCI, UPI and IMPS payments have rebounded sharply after their precipitous drop in April 2020. Before coronavirus had led to a lockdown in India, the total UPI transactions stood at Rs 74 billion in February. This fell to Rs 69 billion in March and Rs 50 billion in April. However, since then, UPI payments have been on a northward trend with Rs 73 billion in May and Rs 88 billion in June 2020. 

After rebounding sharply in May and June, there are signs of weakening again as within weeks numbers of June have gone south. While UPI payments stood at Rs 93 billion during 1 June to 7 June, they fell to Rs 86 billion during 8 June to 14 June and then even lower in the week that followed. 

The government-run UPI had recently achieved an important mark since its inception with payments via this interface marking 100% rise on year in January 2020. The value of UPI transactions crossed Rs 2 lakh crore mark in the first month of the current year. In India, digital payments’ breakthrough can be largely attributed to Prime Minister Narendra Modi’s demonetisation move in November 2016 after which, a large number of the population adopted digital payments even for day to day transactions such as paying for conveyance, buying vegetables etc. Lack of cash in general was a major push towards digital payments.