UPI Payments Growing by 885%: Razorpay According to Razorpay data, UPI has surpassed netbanking and mobile wallets to become the most preferred mode of payment

Year 2019 was the year of fintech industry in India, with digital payment space clocking the highest growth last year. Customer demand for digital transactions grew by a whopping 338 per cent between December 2018 and December 2019, as per the Era of Fintech Rising report by the financial services company Razorpay. It is the fourth edition of the report based on transactions held on the Razorpay platform between December 2018 and December 2019.

Across all the payment options, payments through Unified Payment Interface (UPI) saw the highest growth of 885 per cent during the same period, shows the report.

It comes as no surprise as UPI has continuously scripted headlines since its inception in 2016. In a latest, UPI broke all records by clocking 1.3 billion transactions worth INR 2 trillion in December 2019, according to National Payments Corporation of India (NPCI).

Netbanking and Wallets Lose Sheen

Share of netbanking in the preferred modes of payments dropped by 12 per cent in 2019 compared to 2018, standing at 11.4 per cent of the total share in 2019. The comparison has been done between UPI, netbanking, cards and digital wallets.

Also Read: 6 Ways India's Payment Landscape is Reshaping

Owing to the growth of UPI, share of wallets also continued to decline despite the increase in the number of transactions, said the report. Among wallets, Amazon Pay was the most preferred wallet (33 per cent), followed by Ola Money (17 per cent) and PhonePe (13 per cent).

Preferred Wallets in 2019 and 2018

Source: Razorpay

Cards continued to lead at 46 per cent, however saw a drop of 10 per cent from 2018. In fact, UPI surpassed cards as the preferred mode of payment in September 2019 and continues to do so.

Google Pay was the most preferred UPI app on the platform, with almost 60 per cent market share in 2019, up from 48 per cent in 2018. PhonePe was the second preferred app (26 per cent), followed by Paytm (7 per cent) and BHIM (6 per cent).

Preferred UPI Apps in 2019 and 2018

Source: Razorpay

BHIM, the first UPI app, saw the biggest fall of 21 per cent in market share from 2018. BHIM has been constantly losing UPI customer share, thanks to the high cashback offers by other players.

Consumers continued to spend the most on food and beverages in 2019. Financial services and gaming emerged as the new spending categories for which consumers embraced digital mode of payment.

Top 3 Sectors of Peer-to-Merchant Digital Transactions

Source: Razorpay

Delhi Taking Lead in Digitisation

Delhi NCR jumped three positions to become the second most digitized state in 2019, contributing nearly 10.4 per cent to the total transaction. Bengaluru continued to lead with 23.3 per cent, however falling from nearly 30 per cent in 2018.

Harshil Mathur, CEO and Co-founder, Razorpay said, "The last year has been buzzing for the Fintech sector in Delhi, with the adoption of new digital payment modes and bringing the digital currency to the mainstream. And the last six months saw a tremendous shift in the consumption patterns of businesses and consumer preferences of digital payments in the region. With UPI growing by a whopping 442% in Delhi, I am certain that this payment method will overtake cards by at least 20% in the next 12 months."