Digital spends through the Unified Payments Interface (UPI) have shown a recovery as the economy starts opening up. UPI transaction volumes in May stood at 1.23 billion, matching the March volumes of 1.25 billion after a dip in April, when it saw just below 1 billion transactions for the first time since October 2019. In terms of value, UPI transactions in May stood at Rs 2.18 lakh crore, toppling March numbers of Rs 2.06 lakh crore.

UPI is one of the fastest-growing online payment networks. In May, in value terms, transactions grew by over 44 per cent compared to Rs 1.51 lakh crore of transactions in April, according to data from the National Payments Corporation of India (NPCI), which manages UPI. This also marks the first time that P2M (person-to-merchant) transactions are around 40 per cent of total monthly volumes, a person aware of the matter said, underlining increasing adoption of digital modes for retail payments.

Before the lockdown, P2M transactions were hovering in the range of 25-30 per cent of total volumes on a monthly basis. PhonePe, which sees 40-50 per cent of its UPI transactions made to merchants, said it has seen growth of 50 per cent in new users signing up on its platform to make payments. 

Ashneer Grover, co-founder and CEO of BharatPe, which lets merchants accept payments via any UPI app, told that transaction value per merchant has grown by 50-60 per cent from levels before Covid-19. This is happening as consumers try to avoid physical contact through cash. "Average transaction size at merchants used to be around Rs 280. Now, the same is Rs 600-700," he said.

"We have seen a significant spike in transactions for our in-app use cases like money transfers, mobile recharges, DTH & bill payments. There has also been a spike in the volume of transactions on the PhonePe Switch platform, especially in the case of our partners providing essential supplies such as groceries, medicines and food. With a lot of cities and towns opening up for business, we are witnessing good growth in offline stores - both in terms of volume as well as ticket size," Hemant Gala, VP (payments and financial services) at PhonePe.

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