Small merchants join UPI, size of payments falls


Mumbai: Expenditure patterns and payment modes of Indian consumers showed a divergent trend with average spending on the UPI platform falling due to increased adoption by smaller merchants, while average credit card expenses climbed as the instrument is used for higher value transactions.

Average ticket size of UPI transactions fell 8% to ₹1,515, while average credit card ticket size rose 8% to ₹5,276, according to data from Worldline.

UPI is being increasingly used for small and micro transactions suggesting deeper embedding. This dip in average ticket size is majorly driven by the growth in P2M, or person-to-merchant transactions. P2M transactions volume grew 77% to 38.73 billion.

“This trend shows users’ growing confidence and familiarity with smartphone-based payment methods,” said Ramesh Narasimhan, CEO, Worldline India. “The proliferation of Point of Sale terminals has reached unprecedented levels. This underscores the necessity for FinTechs to adjust to a diverse array of payment channels”

While digital payments are on the rise, conventional cards are also still in demand.

Credit cards issuance rose by 21% in the second half of 2023, with private banks topping the chart, while public banks led in debit cards.“The contrast between private sector banks dominating credit card issuance and public sector banks dominating debit card issuance is clear suggesting the risk appetite among the former is higher while the latter is focused on providing accounts to a larger section of the population including the unbanked”, said Sunil Rongala, senior vice president at Worldline India.


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