Digital UPI Payments Hits 100 Million User Mark In India

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Digital payments in India have reached a new milestone. According to a new report, more than a billion transactions were made on the platform created by India's largest retailing banks. Moreover, UPI has also recorded more than 100 million users since its inception three-and-a-half years ago.

Digital Payments In India
 

Digital Payments In India

The digital payments in India began to take shape after the 2016 demonetization. While the move was aimed to curb corruption, it also kickstarted the digital payments movement in the country. Three and a half years later, the Unified Payments Interface or the UPI has surpassed more than 100 million users.

The digital payments in India are also boosted by affordable smartphones for the population. Moreover, the mobile data prices packed with benefits are found to be numerous in India, than anywhere else in the world. Dilip Asbe, chief executive officer of the National Payments Corporation of India, says that the UPI platform has witnessed the fastest acceptance rate.

Digital Payments Platforms

Digital Payments Platforms

The key factors for digital payments in India are the platforms that support it. Google, Amazon, and Walmart are some of the global tech players, who have pitched for digital payments in India. Walmart with PhonePe, Amazon Pay, Google Pay, and SoftBank-backed Paytm, and many other players in the sector forecast to quintuple to $1 trillion, approximately Rs. 7,070,500 crores, by 2023.

It's also interesting to note that creates of the UPI platform wish to take it to the international market to allow payments in countries like Singapore and the Middle East. The idea behind this is the pulsing Indian population in these regions.

Digital Payments In India: Loss To Gain?
 

Digital Payments In India: Loss To Gain?

At the same time, many of these global tech companies are facing massive losses as they venture into new markets. A forecast by Credit Suisse notes that the loss is expected to grow up to $1 trillion by 2023 from about $200 billion earlier this year.

Digital payments in India are slowly spreading to rural regions. But, PhonePe, Paytm, and Amazon Pay have reported a collective loss of over Rs. 7,070 crores in March. The loss rate has spiked 167 percent from the previous year, reports Economic Times.

The reason behind the loss is because these digital payments platforms are venturing into smaller cities and towns, where the population are first-time smartphone users and merchants new to digital banking.

The digital payments platforms are trying to win over the rustic population with cashback and other goodies. One needs to wait out and see if the expansion-led loss will slowly pave the way for higher profits over time. After all, the new record of more than 100 million users is no small number.

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