UPI QR Transactions Surge 33% in Retail Stores Across Bharat: PayNearby Report

Digital payments have seen remarkable growth beyond tier-2 regions in India, with UPI QR transactions increasing by 33% in retail stores. This surge in transactions highlights the growing adoption of Unified Payments Interface (UPI) across the country, even in remote areas. Additionally, the usage of mPOS (mobile point-of-sale) services has risen by 11% among new retailers, further underlining the increasing shift towards digital payment methods in smaller towns and villages.

PayNearby Report Highlights Impressive Growth in Retail Transactions

PayNearby, a branchless banking and digital network, recently published its "Retail-O-Nomics" report, which delves into the growing trends in retail transactions across India. The report compares data from January to November 2024 with the same period in 2023, revealing a remarkable 297% increase in the volume of credit products. This growth includes business loans, gold loans, personal loans, and revolving credit, reflecting a clear shift towards more financial services being offered through retail channels.

Decline in Micro ATM and AePS Cash Withdrawals

While digital payments are thriving, the report also mentions a decline in certain cash-based services. Micro ATM and AePS (Aadhaar-enabled payment systems) cash withdrawals, which are essential for rural and semi-urban counters, have not met expected growth in 2024. Transaction volumes, along with the average cash withdrawal per transaction, have seen a slight dip, with the average withdrawal falling from Rs 2,624 in 2023 to Rs 2,482 in 2024. Despite this, AePS withdrawals saw significant growth during direct bank transfer (DBT) releases, especially under government schemes like PM Kisan Yojana, where they surged by 35-45%.

Retail Counter Services Gain Trust and Adoption

According to Anand Kumar Bajaj, the Founder and CEO of PayNearby, the report highlights considerable progress in several areas, including the adoption of insurance services, a rise in e-commerce transactions, and a growing demand for credit solutions. This progress demonstrates the increasing trust in retail counters, which are becoming essential hubs for providing financial and digital services to individuals and businesses. As a result, last-mile retail counters have emerged as crucial service providers for the broader population.

Growth in Retailer Registrations and E-commerce Segments

One of the standout findings in the report is a 5% increase in newly registered retailers across the country. This indicates that the retail community is becoming increasingly engaged in enabling assisted digital and financial transactions, thus contributing to the country’s growth. The report also highlights growth in the assisted e-commerce segment, particularly in the branded Shop and PayNearby Mall (e-commerce) categories. The Brand Shop category alone saw a 71% increase in transaction volume and a 41% rise in transaction value. In comparison, the e-commerce category witnessed an impressive 141% growth in transaction volume and a 95% increase in value.

The e-commerce boom has significantly impacted various product categories, with consumer electronics, mobile accessories, and kitchen appliances being among the top-performing categories in the Brand Shop segment. Other popular categories within the broader e-commerce portfolio included clothing, groceries, toys, and personal healthcare products. The average ticket size for the Branded Shop category stood at Rs 2,680, while the broader e-commerce segment averaged Rs 1,288 per transaction.

Rise in Insurance Transactions and Bill Payments

The report also showed a significant rise in the adoption of insurance services. Insurance policy purchases and premium collections saw a 127% increase in transaction volume, along with a 96% growth in new customer adoption. Bill payments, which have become an essential service at local stores, also experienced growth, with a 21% increase in transaction value and a 34% rise in transaction volume. This trend highlights the growing importance of retail stores as critical points for facilitating financial services, particularly in underserved areas.

Slower Growth in Mobile Recharge, ITR Services, and Travel Bookings

On the flip side, some services like mobile recharge, assisted Income Tax Return (ITR) services, and travel bookings showed slower-than-expected growth in 2024. Despite the challenges in these areas, retail outlets continue to play a crucial role in providing essential services to the public, ensuring that they remain vital touchpoints for financial and digital needs.

Peak Banking Transaction Hours

An interesting observation from the report is that 42% of banking transactions occur between 3:00 pm and 9:00 pm, further emphasizing the importance of retail outlets in meeting the banking and digital service needs of customers. This peak period underscores the role of local retailers in facilitating access to digital banking services, particularly for individuals who may not have access to traditional banking hours or infrastructure.