Festive Season on Boost, India’s UPI Transactions Up by 40%

Festive Season on Boost, India’s UPI Transactions Up by 40%

Economists anticipate such development would lead India's GDP among major economies in 2023/24

Consumer spending in India experienced a high rise during the festive season, encouraging economic development. eCommerce saw a rough 20% growth in sales and UPI transactions increased by 40%, showcasing a rise of consumer confidence in UPI transactions.

Festive Season on Boost, India’s UPI Transactions Up by 40%

Economists anticipate such development would lead India's GDP among major economies in 2023/24

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Consumer spending in India is surging throughout the festive season, leading to a rise in the country’s economic development. According to several reports, sales in a variety of sectors including automobiles, smartphones and televisions have significantly increased. 

Amazon and Flipkart both recorded a nearly 20% rise in sales during the first week of the holiday season when compared to the same period last year. Moreover, digital payments, particularly those conducted using the Unified Payments Interface (UPI) have increased significantly with a 40% increase in October, over the previous year. 

Source: (1)

Source: (2)

Unified Payments Interface (UPI) transactions set a new high in October, totalling INR 17.16 trillion, a 9% rise over September. Transaction volume reached 11.41 billion, up 8% from the previous month. 

These data demonstrate significant year-over-year growth, signifying the country’s expanding acceptance of digital payments. Several reasons have contributed to this increase including lower inflation and increased salaries, particularly in rural areas. 

Consumer confidence has reached a four-year high in September, according to the most recent data from the central bank. Moreover, despite interest rate increases throughout the year, demand for bank loans is around a 12-year high, demonstrating consumer sentiment’s strength. 

Source: (3)

According to the International Monetary Fund (IMF), India’s GDP will expand the quickest among major nations in 2023 and 2023, reaching 6.3% in both years. Aside from the festive season, events such as the Cricket World Cup and the impending wedding season are expected to boost demand even further. 

Source: (4)

According to market research firm Redseer Strategy Consultants, online sales on major platforms such as Amazon and Flipkart have topped INR 47 billion in the week ending October 15. Mobile phones, electronics and appliances accounted for 67% of the total sales. 

During the first week of the festive sale, the Flipkart Group asserted its leadership in the competitive landscape, gaining market share and reaching 63% in terms of GMV. Overall, Amazon, Flipkart, Myntra and others are estimated to generate INR 90,000 crores in online GMV during the festive season, representing an 18-20% rise over the previous year. 

Source: (5)

Positive developments are also evident in other payment systems. Immediate Payment Service (IMPS) transactions increased by 4% in volume and 6% in value in October compared to September. During the same time, fastag transactions increased by 7% in volume and 9% in value. 

While the Aadhar-Enabled Payment System (AePS) saw a slight decrease in volume and value in October, it reflects a broader trend of shifting consumer behaviour toward digital alternatives. 

Experts attribute the increase in UPI transactions to factors such as higher smartphone penetration, a digitally literate population and the convenience provided by UPI for both consumers and companies. 

This development represents a significant shift in consumer behaviour away from traditional cash transactions, harmonising with the government’s push toward a cashless economy and its Digital India agenda. 

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Siddhesh Surve

With a background in Journalism, Siddhesh aims to educate readers on tech news in India. Covering national and global events, he wants his readers to be the first to know what’s new in tech today!