20th May 2024 – Recent data from the Reserve Bank of India (RBI) indicates a significant shift in payment trends in India. While the deployment of new Point of Sale (PoS) terminals experienced sluggish growth in fiscal year 2023-24, the adoption of QR codes for UPI payments has doubled over the past two years.
Between March 2023 and 2024, the deployment of new PoS terminals surged by 14%, reaching a total count of 8.9 million. However, this growth rate is notably lower compared to previous years.
In contrast, the use of QR codes for UPI payments via platforms like PhonePe, Google Pay, and Paytm has seen a remarkable increase. March 2024 recorded 346 million QR codes in circulation, a significant rise from 172 million in the corresponding month of 2022.
The convenience of QR code payments, coupled with the government’s zero Merchant Discount Rate (MDR) mandate, has incentivized merchants to transition to UPI payments over traditional card swipes. Consequently, debit card transactions at merchant outlets saw a 32% decrease, while UPI merchant transactions surged by 72%.
Despite the decline in debit card swipes, the usage of credit cards has seen exponential growth, with over 100 million credit cards issued in India.
In response to these evolving payment trends, companies like Pine Labs have launched innovative solutions like Mini, a digital payment device supporting both QR code and card payments.
Furthermore, the RBI has introduced draft rules to regulate point-of-sale payment service providers (PA-P), aiming to bring companies like Innoviti Payments, Pine Labs, and MSwipe under regulatory cover. These rules mandate companies to obtain authorization from the RBI by May 31, 2025, ensuring compliance with regulatory standards.
Overall, the data reflects a dynamic shift in India’s payment landscape, with QR code payments gaining momentum while traditional PoS terminal growth slows down.
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