Mumbai, Sep 27
The Unified Payments Interface (UPI) transactions have grown at a stellar pace of 75 per cent Compound Annual Growth Rate (CAGR), while UPI spends surged at 68 per cent CAGR in the August 2019-August 2024 period, a report showed on Friday, as the card industry’s growth remained tepid.
The immense popularity of UPI is seen from the transaction volume ratio which stands at 38.4 times of credit card transaction volumes, according to the report by Axis Securities.
UPI remains a preferred medium for lower-value payments as 96 per cent of the transaction volume is less than Rs 2,000, although the contribution to total UPI spends was 33 per cent (as of August).
However, given the lower ticket size of UPI transactions, the UPI-to-Credit Card spends stood at 0.3 times in August, which is largely stable at current levels.
The industry’s net card additions stood at 924,000 in August compared to 755,000 in July.
However, the pace has decelerated sharply (down 34 per cent YoY on a year-to-date basis).
“We believe it reflects the issuers’ caution and cherry-picking customers amidst asset quality concerns in the segment. In the first five months in FY25, the industry added 3.7 million cards compared to 6 million in the same period in the last fiscal,” the report mentioned.