Are the new features of UPI working? Recent data shows that the use of many new features is very low. This raises the question as to why these features are not reaching the people.

In fact, in the last few years, the National Payments Corporation of India (NPCI) has launched many new features. These include UPI Lite, payment by wallet, recurring payment by UPI, UPI by RuPay credit card, and UPI Circle. The purpose of all these is to reduce the burden of the banking system from small transactions and make the network faster. But, only recurring payments and UPI by credit card have seen a lot of growth. The rest of the features have not become very popular.

A senior banker of a private bank said that about 10 crore transactions happen every month through wallet-based UPI payment and UPI Lite.

This growth is much slower than the main UPI platform.

What is the benefit of these features?

According to data collected by Economic Times, in April, about 12 crore UPI transactions were done through mobile wallets or prepaid payment instruments (PPIs). Their total value was about Rs 4,000 crore.

Wallet-based UPI payments benefit customers as they can make payments from their mobile wallets. This eliminates a lot of small entries in their bank statements. Another banker said, these are early days. Once merchant payments (payments to shopkeepers) and credit features are added to it, the number of transactions will increase significantly.

How successful is Lite UPI?
UPI Lite does not require second verification for small payments.

It has 8 to 9 crore transactions every month. This is just 0.5-0.6% of the total UPI volume. In April, UPI alone recorded 17 billion transactions, whose value was Rs 23.9 lakh crore. UPI Lite, launched in September 2022, was aimed at making small payments easier. But due to less awareness about it, it could not become very popular.

What is the condition of UPI Circle?

NPCI has also launched UPI Lite X for offline transactions. At the same time, secondary users, such as children or people at home, can make payments from the primary user's account with UPI Circle launched at the Global Fintech Fest last year. Along with this, there is also protection from fraud. But, only a few lakh transactions are being done on it every month.

What is a RuPay card?

It is a debit or credit card issued by banks in India through the RuPay payment network. Like Visa and MasterCard, RuPay is not a card in itself but a payment processing network that makes electronic transactions easy.

Why are companies shying away?

Experts say that due to zero merchant charge i.e. Merchant Discount Rate (MDR), fintech companies are shying away from investing more. A banker said, most of the big fintech companies are not offering much promotion or cashback due to zero MDR.

How much has it lived up to expectations?

Only recurring payments and UPI payments through credit cards have increased. The use of other features is very low.

Due to low awareness, the use of some features (such as UPI Lite and UPI Circle) is decreasing.

Fintech companies are shying away from investing more in promoting UPI features.

What do the figures say?

10 crore: Total number of transactions done through wallet-based UPI payments and UPI Lite every month.

12 crore: Number of UPI transactions done through mobile wallets or prepaid payment instruments (PPIs) in April.

Rs 4,000 crore: Total amount of UPI transactions done through mobile wallets or PPIs in April, as per the data.

8 to 9 crore: Number of transactions done through UPI Lite every month.

0.5-0.6%: Share of UPI Lite transactions in total UPI volume.

4 crore: Number of new mandates registered on UPI AutoPay every month.

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