P2M payments to dominate UPI transactions by 2025

Due to the absence of transaction fees and widespread acceptance, it is projected that person-to-merchant (P2M) transactions in India will make up 75 percent of all United Payments Interface (UPI) transactions by 2025, as reported by the National Payments Corporation of India (NPCI). Currently, P2M transactions constitute 56.1 percent of total UPI transactions.

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The "India Digital Payments Report for H1 2023," published by global payments service provider Worldline, reveals a significant 62 percent increase in UPI transactions during the first half of 2023 compared to the same period last year, primarily driven by P2M transactions.

Out of the 51.91 billion UPI transactions conducted between January and June this year, 29.15 billion were P2M payments, accounting for approximately 56.1 percent of the total. The remaining transactions, numbering 22.75 billion, were person-to-person (P2P) transactions.

Additionally, P2M transactions are experiencing robust growth, surging by 119 percent compared to a 41 percent increase in P2P transaction volume during H1 2023. The report attributes some of this growth to the absence of transaction fees for merchant payments and highlights the extensive acceptance of this payment method among both buyers and sellers.