PhonePe, part of Walmart Inc.-controlled Flipkart Group, clocked more than two billion transactions across payment channels in October, according to a statement on Wednesday. That includes payments made using the Unified Payments Interface and Bharat Bill Payment System. It was only in February that PhonePe had recorded one billion monthly transactions.
The company has 145 million monthly active users, $600 billion annualised total payments value and digital transactions from over 19,000 pin codes covering more than 99% of the country, according to the statement.
PhonePe’s rapid growth—one billion transactions added in just eight months—is indicative of the wider adoption of digital payments in India, accelerated by a pandemic that shut down all but essential goods and services in large parts of the country over a span of 18 months.
The value of transactions using the ubiquitous UPI
crossed the $100-billion mark for the first time last month. A whopping 4.2 billion UPI transactions amounting to Rs 7.71 lakh crore (about $103 billion) were clocked in the month, marking all-time highs on both counts for the five-year-old payments channel. The spurt was largely on the back of increased demand for online shopping amid the festive season sales. The gradual reopening of the economy since the ebbing of the second wave also aided this growth.
“The fact that 80% of our transactions come from Tier-II, III cities and beyond, shows that digital payments have truly penetrated across the length and breadth of the country,” PhonePe’s founder and CEO Sameer Nigam said in the statement.
Still, cash is king in the Indian economy.
The ratio of currency in circulation as a proportion of India’s gross domestic product
touched a new high of 14.5% for fiscal 2020-21 amid the increased demand for cash and a shrinking economy. The post-pandemic increase in currency in circulation is a global phenomenon— described as a ‘dash to cash’ under extreme uncertainty—experienced by the US, Spain, Italy, Germany, France, Brazil, Russia and Turkey.
Meanwhile, digital payments in India are nearly three times of what they were in FY18. The Reserve Bank of India’s digital payments index, which has 2018 as the base year at 100, has risen to 270.
