Digital transactions have increased many times, but their average ticket size is not growing for the domestic payments card.
Last week, the government decided to incentivise banks and fintech players by paying them a percentage of transaction value per transaction made through the domestic RuPay debit card, or a below-Rs 2,000 transaction made using Unified Payments Interface (UPI).
A quick look at transactions under the two modes shows that the average value of transaction is below Rs 2,000 for use of RuPay card at Point-of-Sale machines (PoS), on e-commerce platforms, and for UPI transactions.
UPI transactions quadrupled into the pandemic, from close to one billion per month before, to more than 4 billion/month now. The value transacted has increased from close to Rs 2 trillion per month, and is closing in on Rs 8 trillion per month now.
The average value per UPI transaction has remained stagnant compared to the pre-pandemic period. There are more users now though. Compared to April 2020 (the peak of the nationwide lockdown), the value of an average UPI transaction is 21 per cent up today (November 2021). Compared to April 2019, however, it is stagnant at 1 per cent growth.
For RuPay cards at PoS machines, the average value of transactions was Rs 1,834 in November 2021. This was 38 per cent higher than the lockdown period, and 22 per cent higher than in April 2019, a year before Covid-19 struck.
For the use of RuPay cards on e-commerce sites, the average value of transactions has grown by 65-70 per cent over any of the two reference periods. But there has been a recent dip: it has fallen from Rs 2,000 in April 2021, to below Rs 1,400 in November.