UPI transactions: This festival of lights, UPI lit the biggest fireworks

It was not just the lights and fireworks that went big on Diwali night this year, the country’s digital payment highway-Unified Payment Interface (UPI)-recorded a massive 644 million transactions exceeding its daily average by over a fifth on October31.Data from the National Payments Corporation of India, which runs UPI, shows that transactions on the festival day were 20-25% higher than the normal daily average of 510-520 million transactions.

The spike in ecommerce transactions with purchases ranging from pet products to books, new digital media subscriptions and even holidays contributed to the upsurge in online payments, according to industry data. Online retailers and digital payment companies had been recording brisk sales right through the festive month, running up to Diwali. On the day of Dhanteras, October 29, NPCI recorded 565 million UPI transactions, followed by another 546 million transactions on October 30.

All three days recorded heightened economic activity and in turn, digital payment transactions compared to the daily average of UPI payments.

“The Diwali month is typically characterised by a surge in consumer demand, aggressive marketing and discounts by retailers, increased demand for gold and jewellery, and fewer working days,” said Nomura in a research report titled India: Taking the festive consumption pulse, published on November 5.

Amazon Pay, the fintech arm of ecommerce giant Amazon, said that its credit offerings did well throughout the festive month, driven by offers and incentives on EMI purchases as well as from credit card swipes.

Amazon Pay ICICI Bank credit card usage surged 50% year on year during this year’s sale season on Amazon compared to last year. A third of its consumers paid through Amazon Pay UPI interface, the company said. Amazon ran its festive sales almost through the whole of October. This year, consumers were opting for high value discretionary spends including on experiences. Payment aggregator Cashfree said that holiday spends grew by 60% on its platform as users booked hotels and vacations for the extended weekend, with Diwali night falling on a Thursday this year. Overall, there was a 75% increase in payments for digital goods during the festive season, a spokesperson for Cashfree said.

Benglauru-based Razorpay, one of the country’s largest payment aggregators, said that it saw a 56% jump in consumers buying OTT (Over the Top) subscriptions and a 63% jump in consumers buying pet products. This trend was mirrored across quick commerce platforms like Swiggy Instamart and Blinkit where there was high demand for gift boxes and savouries specifically for household pets throughout the festive weeks.

Online purchases of traditional items including gold, jewellery and clothing were also high, according to data from payment firms.