According to the latest monthly bulletin released by the Reserve Bank of India (RBI) on June 23, the average ticket size of transactions conducted through credit cards was found to be three times larger than those made through the Unified Payments Interface (UPI) in May 2023. The data highlights the disparities between the two popular payment methods in terms of transaction values.
In May, the average ticket size for credit card transactions stood at Rs. 4,968, significantly higher than the average ticket size of Rs. 1,582 for UPI transactions. This disparity can be attributed to various factors, including the higher purchasing power typically associated with credit card usage and the nature of transactions conducted through different payment modes.
The bulletin also noted that with the recent integration of RuPay credit cards with UPI, the share of person-to-merchant (P2M) transactions in terms of value is expected to increase. This shift is attributed to the larger average ticket size observed for credit card purchases compared to UPI transactions.
Despite the discrepancy in average ticket sizes, the RBI Bulletin predicts that UPI will continue to dominate the retail digital transactions volume. It is expected to capture an impressive 90% share of retail digital transactions in the next five years, a significant increase from the 75.6% share it held in the 2022-23 period.
The rise of UPI as a preferred digital payment method can be attributed to its convenience, simplicity, and widespread acceptance across various platforms and merchants. Its seamless integration with banking apps and the ability to transfer funds instantly have made it a popular choice among users.
While credit cards maintain a higher average ticket size, UPI’s growth trajectory is fueled by its increasing adoption among consumers and merchants alike. The RBI Bulletin reflects the broader shift towards digital payments and the evolving landscape of financial transactions in India.
It’s important to note that the RBI Bulletin serves as a monthly publication providing insights into domestic and global economic developments. The views expressed in the bulletin do not necessarily represent the official stance of the central bank.
As digital payments continue to transform the financial landscape in India, the contrasting average ticket sizes between credit cards and UPI transactions highlight the diverse preferences and usage patterns of consumers. With UPI poised to maintain its dominance in retail digital transactions volume, it will be interesting to observe how both payment methods evolve and cater to the needs of users in the coming years.
