Groceries, supermarkets lead UPI merchant payments in July; debt collection tops by value

Groceries and supermarkets emerged as the top category by transaction volume on the Unified Payments Interface (UPI) in July, clocking 3.03 billion transactions worth Rs 64,882 crore, according to merchant category classification data from the National Payments Corporation of India (NPCI).

This was followed by fast-food restaurants and eating places.

By value, debt collection agencies led the list, collecting Rs 93,857 crore through 161 million transactions.


Fast-food restaurants recorded 1.2 billion transactions worth Rs 13,794.2 crore, while eating places and restaurants processed Rs 18,212 crore from 1.1 billion transactions.

Following these, telecommunication services registered UPI transactions worth Rs 21,628.8 crore, and service stations saw Rs 35,188 crore in payments.

Also, about 2.2 billion transactions worth Rs 3.4 lakh crore were classified under ‘others,’ indicating the inclusion of additional merchant categories.

P2P vs P2M split

In total, UPI merchant payments (P2M) stood at 12.38 billion transactions worth Rs 7.34 lakh crore in July. Including person-to-person (P2P) transfers, total UPI volumes reached 19.47 billion transactions worth Rs 25.08 lakh crore. P2P accounted for 7.08 billion transactions worth Rs 17.74 lakh crore.

This marked an increase in both transaction volume and value compared to June, when total UPI transactions dipped to 18.40 billion worth Rs 24.04 lakh crore.

Among remitter banks, State Bank of India (SBI) led with 5.21 billion transactions, followed by HDFC Bank (1.54 billion), Bank of Baroda (1.33 billion), and Union Bank of India (1.2 billion). On the payment service provider side, Axis Bank processed the highest volume at 7.23 billion transactions with a 93.26% approval rate, followed by Yes Bank and ICICI Bank.

This comes amid ongoing discussions about the cost of processing UPI transactions. Some banks have begun levying charges on certain UPI payments after the government reduced incentives for processing small-value merchant transactions.

As reported by ET earlier this month, the finance ministry cut the incentive for processing small-ticket UPI transactions at small merchant outlets to 0.15% per transaction from 0.25% last year.

Other digital payment channels also saw growth in July. Immediate Payment Service (IMPS) transactions rose to 482 million, worth Rs 6.31 lakh crore, from 448 million, worth Rs 6.06 lakh crore, in June. Aadhaar Enabled Payment System (AePS) transactions increased to 103 million from 97 million in June.

The National Payments Corporation of India (NPCI), however, is yet to release app-wise UPI data for July. As of June, Google Pay and PhonePe continued to dominate the UPI ecosystem, together accounting for over 80% of the market. Emerging players such as Navi, Flipkart-backed Super.Money and Cred are expanding their share by offering cashbacks and other incentives.