UPI Transactions: Temporary Dip

• Sequential Decline: The 2% drop in volume and 3% drop in value in April is seasonal, following a March high driven by fiscal year-end business settlements and consumer purchases. The drop is not structural.
• Sustained YoY Growth: A 34% YoY rise in volume and 22% in value shows UPI remains firmly entrenched as India’s primary digital payment method.
• Stability in Daily Usage: Nearly constant daily transaction volume (596M vs 590M) suggests strong baseline activity, indicating that UPI usage is habitual, not event-driven.

IMPS: Losing Ground to UPI

• Month-on-Month Decline: A 3% fall in transaction volume and 7% drop in value.
• Structural Trend: IMPS continues to cede ground to UPI, especially with UPI’s expanding use cases (e.g., credit cards on UPI, UPI for MSMEs).
• IMPS is becoming more niche and institutional, while UPI handles the bulk of retail digital flows. Expect further relegation of IMPS unless it innovates or finds distinct utility.

AePS: Volatile and Region-Dependent

• Sharp MoM Drop: 16% fall in transactions, 13% drop in value.
• YoY Resilience: Despite the MoM fall, AePS saw 2% volume and 6% value growth YoY.
• Rural Dependency: AePS remains rural-focused, and transaction volumes often vary with MNREGA cycles, subsidy disbursement, or agricultural seasons.
• AePS is cyclical and policy-sensitive. Its drop may reflect lower government disbursements or reduced cash withdrawal needs in April.

BS