 "BHIM dilemma: Transaction value high, but volumes way lower than rivals")
Though the Unified Payments Interface (UPI) has been a success for the government, its own app has failed to sustain interest.
The Bharat Interface for Money or BHIM, which accounted for a quarter of transactions carried out using UPI within a year of launch, has a minuscule share of 0.76 per cent of the Rs 86.9 trillion worth of UPI transactions now. It lags far behind rivals Google Pay and PhonePe, which account for 86 per cent of the market.
Though BHIM’s popularity grew, its growth was dwarfed by that of other platforms. BHIM recorded a 46 per cent rise in transactions in the past three years, but industry volumes jumped 267.19 per cent over that period. PhonePe and Google Pay recorded a 170.65 per cent increase.
The broad-basing of PhonePe and Google Pay contributed to a decline in average transaction value on these apps. Meanwhile, BHIM has become a high-value player. The average transaction value on BHIM rose to Rs 3314.13 in the first nine months of financial year 2022-23 (FY23) from Rs 3194.12 in the whole of FY22. This was twice as high as the average value of the UPI universe, which was Rs 1670.55 in the first nine months of FY23.
Meanwhile, RuPay’s performance presented a contradictory picture. Although it accounted for 65 per cent of debit cards issued, its share in all debit and credit card transactions (PoS and e-commerce) remained 20.72 per cent. It appeared, however, to be catching up with the industry. Though the average transaction size was just Rs 1,867.29 in FY23, it was higher than in 2022, when it was Rs 1,617.22, which was 51.78 per cent lower than the average of Rs 3,124.34 for the rest of the industry.
The Bharat Interface for Money or BHIM, which accounted for a quarter of transactions carried out using UPI within a year of launch, has a minuscule share of 0.76 per cent of the Rs 86.9 trillion worth of UPI transactions now. It lags far behind rivals Google Pay and PhonePe, which account for 86 per cent of the market.
Also Read
On Wednesday, the Union Cabinet approved a financial incentive of Rs 2,600 crore to provide an impetus to low-value BHIM-UPI transactions and promote transactions via RuPay cards, a card network started by National Payments Corporation of India to rival Visa and Mastercard.
Though BHIM’s popularity grew, its growth was dwarfed by that of other platforms. BHIM recorded a 46 per cent rise in transactions in the past three years, but industry volumes jumped 267.19 per cent over that period. PhonePe and Google Pay recorded a 170.65 per cent increase.
The broad-basing of PhonePe and Google Pay contributed to a decline in average transaction value on these apps. Meanwhile, BHIM has become a high-value player. The average transaction value on BHIM rose to Rs 3314.13 in the first nine months of financial year 2022-23 (FY23) from Rs 3194.12 in the whole of FY22. This was twice as high as the average value of the UPI universe, which was Rs 1670.55 in the first nine months of FY23.
Meanwhile, RuPay’s performance presented a contradictory picture. Although it accounted for 65 per cent of debit cards issued, its share in all debit and credit card transactions (PoS and e-commerce) remained 20.72 per cent. It appeared, however, to be catching up with the industry. Though the average transaction size was just Rs 1,867.29 in FY23, it was higher than in 2022, when it was Rs 1,617.22, which was 51.78 per cent lower than the average of Rs 3,124.34 for the rest of the industry.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →Subscribe to Business Standard digital and get complimentary access to The New York Times
Quarterly Starter
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
Save 46%
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%