UPI Usage Takes Centre Stage Tier II Cities

The use of digital technology and UPI is changing rural India. Reportedly, in 2023, there was a huge 118% increase in both the number of transactions and the amount of money spent at local stores.

A recent report by PayNearby highlights a remarkable surge in both the volume and value of UPI transactions at retail outlets, emphasizing the growing acceptance and adoption of digital payment methods beyond Tier II regions. Additionally, assisted e-commerce, or meta-commerce, experienced a robust growth of 91% at semi-urban and rural retail counters, signifying a paradigm shift in consumer behavior towards digital transactions.

Insurance Sector & PAN Card Issuance

Insurance policy purchases and premium collections saw an astonishing 150% growth in transaction volume and a significant 140% increase in new customer adoption, illustrating the pivotal role of digital retail stores in addressing insurance penetration challenges in rural areas. PAN Card issuance services also witnessed an exceptional growth of 437%, highlighting the increasing demand for identification documentation in these regions.

Financial Inclusion & Government Schemes

During the release of PM-Kisan Samman Nidhi funds, cash withdrawal at retail stores grew by an average of 36% compared to the rest of the year, showcasing the critical role of these outlets in facilitating financial transactions, especially during government scheme disbursements. Moreover, Micro ATM and AePS cash withdrawals, although falling short of expected growth, remained essential for rural and semi-urban digital counters.

Credit Products & Assisted E-commerce

Credit products, including personal loans and gold loans, gained significant traction, crossing a seven-figure mark in disbursements within a few months of launch. The report highlights a growing trend with 21% of applicants being new to credit, reflecting a dynamic, youthful entrepreneurial base in rural areas. The assisted e-commerce segment, meta-commerce, emerged as another significant highlight with ~40,000 retailers actively engaged in providing e-commerce services.

Bill Payments & Other Digital Services

Bill payments at local stores witnessed a substantial increase of 74% in value and 39% in volume, indicating a shift towards digital methods for various financial and lifestyle needs. The report also notes a staggering 65% surge in cash collection at retail counters, reflecting the soaring demand for credit and financial solutions nationwide.

Anand Kumar Bajaj, Founder, MD & CEO of PayNearby, commented on the report, stating, “Retail-O-Nomics depicts a narrative where hinterlands not only keep pace with urban areas but actively integrate into the formal economy. This report aims to catalyze dialogues and implement measures for widespread financial and digital service accessibility, especially in Tier II and beyond."

The 'Retail-O-Nomics' report provides a comprehensive overview of the transformative impact of digital transactions in rural and semi-urban areas, emphasizing the crucial role played by retail outlets in facilitating financial inclusion and access to a wide range of digital services. As India continues to progress towards a digital economy, these findings highlight the evolving landscape of retail transactions and the potential for further growth and innovation in the coming years.

If you want to know more about UPI & its growth in India, watch this video below:

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