Unified Payments Interface (UPI) transactions are up 118% and 106% in volume and value respectively at semi-urban and rural stores. The figures represent the growing adoption of UPI beyond Tier II regions in India. In addition, mPOS (Mobile Point of Sale) acceptance rises by 5% in value, according to data released by PayNearby. It says the figures highlight the increasing adoption of cutting-edge technology among small merchants.

The data is set out in a PayNearby report, ‘Retail-O-Nomics’. India’s largest branchless banking and digital network says that the report compiles data points related to digital transactions carried by customers at retail stores, including kirana stores, mobile recharge shops, medical establishments, CSPs, and travel agencies, across semi-urban and rural areas in India.

Highlights include a significant rise in insurance policy purchases and premium collections. They are up by 150% in transaction volume and 140% in new customer adoption. This underlines the role of digital retail stores in addressing the challenges of insurance penetration.

Transactions rise by 10%

Overall, transactions grew by 10% both in volume and value. The transactions include not only banking and financial services, but also digital services like utility payment, cash collection, credit, insurance and assisted commerce.

In 2023, Micro ATM and AePS cash withdrawals, pivotal for rural and semi-urban digital counters (retail stores), fell short of expected growth. However, MATM device demand remained robust, marking a 17% surge in purchases compared to last year. Although transaction volume decreased, the average cash withdrawal per transaction grew slightly.

The report also highlights a 65% surge in cash collection at retail counters. This reflects soaring demand for credit and financial solutions nationwide.

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By GlobalData

Amongst credit products, business, personal, and gold loans gained rapid traction.

FY 2023 saw a surge in re-banking at retail counters, opening 175,000 new current and savings accounts. The report highlights a robust 202% growth in account balances compared to last year.

There remains a huge untapped market

Anand Kumar Bajaj, Founder, MD & CEO, PayNearby, said, “Embracing rural India’s pulse, Retail-O-Nomics depicts a narrative where hinterlands not only keep pace with urban areas but actively integrate into the formal economy. The surge in GTV results from not only the growth in traditional banking and ATM services. But also the adoption of products like UPI and MPOS, NTC credit solutions, insurance, e-commerce and more. Despite this, there’s still a huge untapped market needing the right product, pricing, and distribution for easier adoption.”

Bill payments spiked by 74% in value and 39% in volume, while mobile recharge grew by 3%. Assisted Income Tax Return (ITR) services rose by 4%. Travel bookings maintained an 8% growth in flights and 6% in rail bookings during festivals. New PAN Card issuance and corrections skyrocketed by 437%. Notably, 41% of banking transactions occurred from 3.00 pm to 9.00 pm. This highlights retail outlets’ crucial role in meeting banking and digital needs, especially within the PayNearby network.