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UPI transactions growing way faster than Aadhaar-based payments: Report

UPI can be easily integrated while Aadhaar Pay relies more on merchants.

unified payments interface

While Aadhaar Pay — a biometrics-based payments system — launched almost a year after the Unified Payments Interface (UPI), it seems to have not gained as much popularity as its older sibling. Aadhaar Pay usage is largely limited in the country, and UPI seems to be recording 3X more in transaction volumes, ToI reports. Aadhaar is critical because it serves as the primary identification for India’s billion-plus citizens, and is being used for KYC compliance fairly heavily. But when it comes to payments, the one-click UPI app has gained in popularity.

Recent data reveals that the Aadhaar-Enabled Payment System (AEPS) processed only 69 lakh transactions in July, while UPI recorded 1.2 crore transactions in the same period. Value-wise too, AEPS generated Rs. 1,409 crore, while UPI’s gross stood at Rs. 3,411 crore. UPI is now growing over 10 percent month-on-month and is processing close to 12 million transactions every month. Its average ticket size is higher than that of AEPS and even BHIM — another government-backed payments app. While payments on Aadhaar may not be a rage yet, Aadhaar’s overdraft verification service witnessed 3.3 crore transactions in July. ALSO READ: Digital India: UPI-based transactions grew more than 20 times since demonetization

These numbers are in conflict with the National Payments Corporation of India (NPCI) announcement last month when it crossed 1 billion monthly transactions. It said that the surge was led by the growth in AEPS, especially in rural markets. “Highest growth has been seen in the mobile payments and Aadhaar-based payments,” NPCI had said. LSO READ: Digital India: Aadhaar-based Digi Pay app now used by 22,000 village entrepreneurs

However, that Aadhaar is less popular than UPI is a fact agreed upon by banks, most of which have rolled out their respective UPI apps. “UPI is easily integrable with many of the bank’s existing mobile apps. But Aadhaar relies more on the network of business correspondents and micro ATMs for last-mile payments,” a leading bank official was quoted as saying. UPI has found favor among global giants too.

Uber most recently announced UPI integration in partnership with HDFC Bank and Axis Bank. Amazon and WhatsApp  are also reported to be working on their respective UPI-enabled payments systems for India. Google is apparently developing a separate India-focused app, which could have a different name, in integration with a bank. It is awaiting RBI approval for the rollout. Global tech companies “see UPI as a simple, seamless payment option with a mobile focus… If these players put their weight behind UPI, it will definitely give a big push to UPI to reach 50 million to 100 million users in the next few years,” NPCI said in an earlier statement.

  • Published Date: September 5, 2017 1:53 PM IST