Unified Payments Interface (UPI) transactions saw a 118% and 106% growth in volume and value respectively at semi-urban and rural stores, representing the growing adoption of
UPI beyond Tier II regions in the country, a latest report by PayNearby said on Wednesday.
It also highlighted that the mPOS (Mobile Point of Sale) acceptance too witnessed a growth of 5% in value, emphasising the increasing adoption of cutting-edge technology among small merchants.
The insights, which are part of the third edition of the Pan-India report titled ‘Retail-O-Nomics’, further said that the insurance policy purchases and premium collections surged by 150% in transaction volume and 140% in new customer adoption, underlining the role of digital retail stores in addressing the challenges of insurance penetration in Bharat, and their gradual evolution into multi-utility centres for citizens.
It is worth noting that on Tuesday, Union Minister of State for Finance Dr. Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha said the digital payments have significantly increased in recent years, as a result of coordinated efforts of the Government with all stakeholders.
The Minister further stated that the total digital payment transactions volume increased from 2,071 crore in FY 2017-18 to 13,462 crore in FY 2022-23 at a CAGR of 45 per cent. During current FY 2023-24, digital payments transactions have reached 11,660 crore till December 11, 2023.
In the same context, the report said the nationwide new registered retailer count increased by 9%, underscoring the eagerness of the retail community to participate in India’s growth story by facilitating assisted financial and digital transactions at nearby stores. Overall, transactions grew by 10% both in volume and value.
It highlighted that the transactions include not only banking and financial services, but also digital services like utility payment, cash collection, credit, insurance, assisted commerce and more, indicating a significant behavioral shift among consumers in these regions towards assisted digital methods for their banking and lifestyle needs, contributing to their integration into the formal economy.
Surge in EMI collections for NBFCs, MFIs, and SFBs
The report highlighted a staggering 65% surge in cash collection at retail counters, reflecting soaring demand for credit and financial solutions nationwide. With an average monthly collection of Rs 1,700 crores, the company witnessed heightened demand across various processes, including a remarkable 25% surge in EMI collections for NBFCs, MFIs, and Small Finance Banks.
This uptick in EMI collections signifies a rising awareness and interest in credit and financial offerings at the grassroots level.
Additionally, positive growth in subscriptions for OTTs, online education, and online gaming underlines a latent demand for digital services, indicating Bharat’s growing affinity towards digital products.
Micro ATM, AePS cash withdrawals pivotal
In 2023, Micro ATM and AePS cash withdrawals, pivotal for rural and semi-urban digital counters (retail stores), fell short of expected growth.
MATM device demand remained robust, marking a 17% surge in the purchases compared to last year. Although transaction volume decreased, the average cash withdrawal per transaction grew slightly from Rs 2595 in 2022 to Rs 2624 in 2023.
Notably, AePS withdrawals surged consistently by 30-40% during DBT releases, notably during PM Kisan Yojana credits, as compared with the rest of the year.
Performance of credit products, youthful entrepreneurial base
Amongst credit products, business, personal, and gold loans gained rapid traction, surpassing a seven-figure mark in loan disbursement. Impressively, 21% of applicants were new to credit (NTC), reflecting a growing trend.
The average age of 28-30 highlights a dynamic, youthful entrepreneurial base. These loans, catering to SMEs’ working capital and individual lifestyle upgrades, underscore the urgent need for scalable, affordable credit solutions for India’s unhindered progress.
The assisted e-commerce segment, meta-commerce emerged as another significant highlight this year, with a network of ~40,000 retailers actively engaged in providing e-commerce services.
Particularly noteworthy is the substantial traction of the Branded Shop category, featuring top brands across consumer electronics, mobile accessories, kitchen appliances and more. Popular categories in the ecommerce portfolio include grocery, grooming, toys, and healthcare products.
The average ticket size in the branded shop category was Rs 3,184, while for the rest of the ecommerce portfolio, it was Rs 1,586.
