UPI a big hit with retailers

May 17, 2023

UPI has emerged as the most preferred mode for consumers to make payments at retail outlets, finds a study by digital lender NeoGrowth. Nearly 70 per cent of the retailers anticipate over 50 per cent of the purchases made at their stores to be conducted through UPI.

The report ‘Decoding Digital Payments: A Retailer Perspective’ is based on customer data of 3,000-plus retailers along “MSME Retailers are increasingly recognizing the benefit of using digital payments in their business driven by ease of use and customer convenience. UPI is spearheading the adoption of digital payments among Retailers by ticking all the right boxes,” said Arun Nayyar, Managing Director and CEO, NeoGrowth.

Interestingly, the uptake of UPI is higher in metros than in smaller cities. Retailers in Bengaluru saw a 14 per cent increase in the share of UPI among their digital transactions, followed by Chennai and Hyderabad at 13 per cent each compared to pre-COVID levels. Smaller cities experienced only a four per cent increase.with a survey of 1,000 retailers across India.

While usage of UPI is seeing an upward swing, there is a decline in card transactions, by around 12 per cent across all industry segments. The downward trajectory can primarily be attributed to the rise in the adoption of contactless payment methods, a trend that gained momentum during the pandemic. The drop is most pronounced in bigger cities like Chennai, which were among the top card users.