Debit card payments remained slow on account of surge in digital transactions after the pandemic, and the Unified Payments Interface (UPI) has emerged as the most popular mode of money transfer, especially for smaller transactions, shows the RBI data.
In July 2020, the total debit card spends stood at ~2.81 trillion, as compared to ~3.15 trillion in July 2023, reflecting a growth of 11.96 per cent, reported Business Standard.
UPI spends have seen a whopping growth of 428 per cent, zooming from ~2.90 trillion to ~15.33 trillion during the same period, the data revealed.
In August this year, UPI transactions hit ~10 billion for the first time in a month. Monthly UPI payments in value terms are now clocking at more than ~15 trillion.
In July 2020, banks issued 852.35 million debit cards. Three years later, that number has touched 970.74 million, indicative of the flat growth trajectory. This was due to the Pradhan Mantri Jan Dhan Yojana (PMJDY), which gave account holders a debit card during the opening of a Basic Savings Bank Deposit Account.
“A multi-fold increase seen in UPI transactions in the past decade is driven primarily by an increased user base due to higher penetration seen towards rural India. This was also supported by the expanding account base in terms of linkage with savings accounts, Rupay credit cards and current accounts, no additional cost on transfers, hassle-free transactions and the increased internet and smartphone penetration,” Aniket Dani, director of Research, Crisil Market Intelligence and Analytics.
With the government attaching an increased importance to digitisation, the growth in UPI transactions is likely to continue. “Over time, P2M [person to merchant] transactions will drive UPI transactions growth and it will be no surprise if UPI transactions hit 20 billion a month in 18-24 months,” Rongala added.
Meanwhile, credit card usage continues to remain buoyant, with spending rising to a record high of ~1.45 trillion in July 2023 as compared to ~0.45 trillion in July 2020.