(IANS) Despite crossing 5 billion transactions in a month for the first time in March, a new report said on Monday that the Unified Payments Interface (UPI) is yet to penetrate rural India where the usage is a dismal 3-7 per cent.
Nearly 40 per cent of rural consumers who were surveyed revealed that they are unaware of UPI and digital payments and don’t know how to use it, including expressing fears of losing their money through such payments, according to leading village commerce networks 1Bridge.
Around 20 per cent of them expressed a preference for cash-based payments while 10 per cent cited low bank balance or inactive bank accounts as reasons for no UPI experience.
“We aim to accelerate financial and digital inclusion, so that everyone can benefit, even in the most remote regions. Our partnership with the Karnataka State Rural Livelihood Promotion Society and WhatsApp enables us to take several steps towards this goal,” said Madan Padaki, Founder and CEO, 1Bridge.
The company tracked thousands of UPI transactions from a group of rural consumers in a specific 30-day period. An analysis of the data showed that the average transaction value was Rs 1,450.
“Paying for goods and services in stores accounts for 40 per cent of all transactions. The UPI usage is highest in hotels, provision stores and hardware stores,” the findings showed.
While 11 per cent of the UPI transactions are loans or repayments between individuals, 6 per cent are cash pass-through payments intended for someone else, without a UPI.
By driving awareness on UPI and handholding consumers do their first UPI transaction through its network, 1Bridge expects that it can drive up the UPI usage in rural India to 20-25 per cent over the next 12 months.
1Bridge operates in more than 10,000 villages across 77 districts through a network of over 10,000 local entrepreneurs.
“A sustained effort on this front will enable us to demonstrate the benefits of UPI soon, increasing its penetration throughout rural India,” Padaki said.
According to the National Payments Corporation of India (NPCI), UPI had processed 5.04 billion transactions till March 29, amounting to Rs 8.88 trillion.
This was 11.5 per cent higher than the volume of transactions processed in February and 7.5 per cent higher in terms of value of transactions processed.