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NEW DELHI — As India's digital and less-cash journey gains steam, more and more people are not only purchasing their daily essentials via unified payments interface (UPI) mode of digital transactions but also costly home appliances, high-end gadgets and designer apparels, among other things.
The seamless digital journey via the UPI mode has also resulted in people overspending on stuff they actually may not need at times, experts said on Saturday.
The purchasing trend via UPI/QR code is due to the fact that digital transactions now take a jiffy to complete the purchase journey via smartphones.
According to a recent survey by IIIT Delhi, nearly 74 per cent of people in the country are ‘overspending’ as a result of using UPI and other digital payment methods.
"The convenience and ease of digital transactions through UPI, in comparison to cash, may indeed lead to lower awareness of spending, as transactions are seamless and reduce the tangible feel of money leaving one's possession," Prabhu Ram, Head, Industry Intelligence Group at market intelligence firm CMR, told IANS.
Latest data from the National Payments Corporation of India (NPCI) revealed that the number of Unified Payments Interface (UPI) transactions reached 1,330 crore in April. On a year-on-year basis, the UPI transaction count has increased by 50 per cent.
Last year, the UPI transactions increased by almost 60 per cent to reach a record 11,768 crore.
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Ramesh Narasimhan, Chief Executive Officer-India, Worldline, said that UPI maintains its position as the uncontested frontrunner, buoyed by substantial expansion in mobile transactions.
"This trend underscores users' growing confidence and familiarity with smartphone-based payment methods," Narasimhan added.
The average ticket size (ATS) of UPI transactions has also declined by 8 per cent from INR 1,648 to INR 1,515.
According to experts, consumer spending in India is soaring, with people splurging on cars, smartphones, TVs and other items, boosting the country's economic growth.
However, the trend has also seen people overspending on certain high-priced items, thanks to UPI.
A recent report by Nielsen Media India, on behalf of Amazon India, showed that digital payment methods are on the rise in the country, with 42 per cent of consumers saying they will choose UPI for online festive shopping.