MUMBAI: The debit cards appear to losing shine amid growing popularity of India’s indigenously-developed payments system United Payment Interface (UPI). The transactions through UPI have soared in the last financial year while usage of debit cards has declined, showed the Reserve Bank of India data.
Total number of transactions through UPI has soared 82% to 8,371 crore in 2022-23 from 4,595 crore in 2021-22, according to the RBI data. However, the number of transactions through debit cards have declined by 13% to 341.9 crore in 2022-23 from 393 crore in 2021-22.
The waning popularity of debit card is also visible in terms of value of transactions. The total value of transactions through UPI has surged by 65 % to Rs 139 lakh crore in 2022-23 from Rs 84 lakh crore in 2021-22, while the total value through debit cards fell by around 1.5% to Rs 7.2 lakh crore in 2022-23 from Rs 7.3 lakh crore.
“The ease of using the platform has made it popular among individuals. Any bank’s customer can join UPI platform and make payment. So there is no barrier in terms of which bank you are associated with. After an individual has linked his bank account to UPI, there no need for any additional details such as IFSC code, account details etc,” Anup nayar, CEO of In-Solutions Global told this newspaper.
The popularity of debit card may be falling but the plastic cards are likely to stay in the market for longer.
“The debit cards still are playing important semi urban and rural areas. Also banks are deploying more Point of Sale (PoS) machines in semi urban and rural areas. They are playing important role in financial inclusion,” a senior bank official told this newspaper.
“UPI and debit cards are important for economy as they help in reducing the use of physical cash in the country,” he added. According to the data, cash is expected to decline by 34 percent in transaction value by 2026 and digital wallets are expected to rise in transaction value by 88 percent by 2026.
UPI transactions soar 82% in FY23, debit card use falls
Number of transactions via UPI has soared 82% to 8,371 crore in 2022-23 from 4,595 crore in 2021-22, as per RBI data. However, the number of transactions through debit cards have declined by 13% to 341.9 crore in 2022-23 from 393 crore in 2021-22