CIOInsider India Magazine
Transactions on UPI could Shift Businesses Away from NEFT
As payments on the digital platforms are gathering a step, a surge in transactions on the Unified Payments Interface (UPI) platform could shift business away from NEFT. While the share of NEFT in retail credit transfers have fallen over eight percent in one year, this has largely been grabbed by UPI.
According to the reports, central bank data showed overall retail credit transfers through various platforms rose 20 percent in value and 77 percent in volume in December 2021 over last year. But NEFT transfers rose only 6.5 per cent in value and 22 per cent in volume. During the same period, UPI transfers rose 98 percent in value and 104 per cent in volumes.
Nitin Aggarwal, senior analyst, Motilal Oswal Securities says, “UPI payments have grown at 23.4 percent CAGR (37x) over the past three years, unfazed by the pandemic, while a few other digital payment instruments reported a sharp moderation. The UPI channel has surged backed by NIL charges and higher convenience for customers.”
Reports suggest that, the surge in UPI transactions and fall in NEFT will be attributed to the benefit of transaction on the previous. UPI is a less complicated channel the place one need not know the beneficiary’s checking account particulars to switch funds. In case of UPI, a QR scan is sufficient to ship cash. Additionally, whereas banks levy two to five rupee as transaction payment, no such quantity is levied on UPI.
UPI continues to outperform. Its market share, when it comes to digital funds, has elevated from 8.1 percent in January 2020 to 20 percent in January 2022
Share of UPI in retail credit score transfers rose in worth phrases from twelve percent in December 2020 to 20 percent in December 2021.Besides the share of NEFT rose from 70.4 percent in December 2020 to 80 percent in December 2021.
Ansuman Deb, ICICI Securities says, “UPI continues to outperform. Its market share, when it comes to digital funds, has elevated from 8.1 percent in January 2020 to 20 percent in January 2022.”
