Digital India Makes Inroads In Bharat! Retail UPI Transactions Soar In Semi-Urban, Rural Regions: Report

In a testimony to Digital India’s increasing penetration in the country’s financial sector, a report titled Retail-O-Nomics by PayNearby, a branchless banking and digital network, revealed that Unified Payments Interface (UPI) transactions have increased 118% and 106% in volume and value respectively. This rise is coming from stores in semi-urban and rural areas of the country pointing to a deep reach of UPI beyond Tier II regions in India. Apart from this, the mPOS (Mobile Point of Sale) are also witnessing a growth of 5% in value. The digital wave is not limited to retail transactions but even Insurance policy purchases and premium collections have witnessed a surge of 150% in transaction volume and 140% in new customer adoption.

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The other key highlights from the third edition of the ‘Retail-O-Nomics’ report are: 

- The nationwide new registered retailer count increased by 9%, and overall, transactions grew by 10% both in volume and value

- Apart from banking and financial services, transactions also include digital services like utility payment, cash collection, credit, insurance, assisted commerce and more

- In 2023, Micro ATM and AePS cash withdrawals fell short of expected growth

- MATM device demand saw a 17% surge in purchases compared to last year

- AePS withdrawals witnessed a consistent rise of 30-40% during DBT releases, specifically when PM Kisan Yojana credits were distributed

- There was a staggering 65% surge in cash collection at retail counters

- 25% surge in EMI collections for NBFCs, MFIs, and Small Finance Bank

- Amongst credit products, business, personal, and gold loans gained rapid traction

- 21% of applicants were new to credit (NTC)

- The average age of 28-30 highlighted a dynamic, youthful entrepreneurial base 

- Bill payments spiked by 74% in value and 39% in volume

- Mobile recharge grew by 3%

- Assisted Income Tax Return (ITR) services rose by 4%

- Travel bookings maintained an 8% growth in flights and 6% in rail bookings during festivals

- New PAN Card issuance and corrections skyrocketed by 437%.

- 41% of banking transactions occurred from 3.00 pm to 9.00 pm

The year witnessed an increase in re-banking at retail counters. 175,000 new current and savings accounts were opened. The report also pointed to a robust 202% growth in account balances compared to FY 2022.

Commenting on the report findings, Anand Kumar Bajaj, Founder, MD & CEO, of PayNearby, said, “Embracing rural India's pulse, Retail-O-Nomics depicts a narrative where hinterlands not only keep pace with urban areas but actively integrate into the formal economy. The surge in GTV results from not only the growth in traditional banking and ATM services but also the adoption of products like UPI and MPOS, NTC credit solutions, insurance, e-commerce and more. Despite this, there's still a huge untapped market needing the right product, pricing, and distribution for easier adoption. This report aims to catalyse dialogues and implement measures for widespread financial and digital service accessibility, especially in Tier II and beyond. Committed to this vision, we empower retailers and consumers through user-friendly solutions, focusing on technology simplification and democratization via our Distribution-as-a-Service network.

A case in point is the introduction of assisted ecommerce in our network. With this service, rural aspirational customers are getting the choicest products at a nearby store, retailers are seeing enhanced income, and e-commerce partners are not only reaching new markets, but seeing reduced returns rates, optimizing overall business costs. Return rates through meta-commerce are nearly 1/3rd of the standard return rate witnessed by B2C e-commerce platforms, highlighting the significant role played by human interventions at retail counters in the overall consumer experience.”