In a recent report by PayNearby, it was revealed that UPI QR transactions in retail stores across semi-urban and rural areas in India have seen a remarkable surge of 33% in 2024. This significant growth reflects the increasing adoption of digital payments in Bharat, where consumers are embracing technology to conduct transactions at retail points, facilitating easier and more efficient payments.

The rise in UPI QR transactions marks a major step towards achieving financial inclusion in areas previously underserved by traditional banking infrastructure. As the digital payments ecosystem expands in these regions, the report, titled Retail-O-Nomics, highlights how UPI payments have become an integral part of daily life in rural and semi-urban India, bringing financial services closer to people in Bharat.

In addition to the increase in UPI transactions, the report also showed a 127% increase in transaction volume for insurance policy purchases and premium collections. This surge underscores the growing importance of digital platforms in making insurance more accessible to the people of Bharat. As insurance penetration remains a challenge in rural areas, digital retail stores are playing a pivotal role in helping consumers navigate this sector, making insurance policies more affordable and accessible.

The 96% increase in new customer adoption for financial services also highlights the growing role of retail stores as financial service providers. With small retailers across Bharat offering a wide range of digital services, including e-commerce, insurance, and lending, they are rapidly becoming key players in driving financial access at the grassroots level.

The data from PayNearby is based on real transaction data from over 10,00,000 small retailers who offer financial and digital services in rural and semi-urban India. This extensive dataset reflects the success of initiatives aimed at financial inclusion and digital empowerment in regions outside urban centers.

One of the most significant findings of the report was the 297% rise in transaction volumes for credit products, including business loans, gold loans, personal loans, and revolving credit in rural areas. This surge in credit demand points to a growing need for credit solutions at the grassroots level, where access to traditional financing options has often been limited. Retail stores offering these credit services are helping to bridge the gap and provide much-needed financial support to businesses and consumers in semi-urban and rural areas.

However, there was a slight decline in micro-ATM and Aadhaar Enabled Payment System (AePS) cash withdrawals in 2024, with the average withdrawal amount decreasing from US$ 30.82 (Rs. 2,624) in 2023 to US$ 29.15 (Rs. 2,482) in 2024. Despite this, AePS withdrawals surged by 35-45% during Direct Benefit Transfer (DBT) releases, particularly under schemes such as PM Kisan Yojana, signaling that government-led financial assistance programs are driving up cash withdrawals in areas that depend heavily on such transfers.

In Jammu and Kashmir, cash withdrawals saw impressive growth, with a 58% increase in value and a 74% increase in volume, showcasing the region’s growing reliance on digital financial systems. This growth is a reflection of the expanding reach of digital financial services across the country and highlights the importance of financial inclusion for regions with historically lower banking penetration.

Anand Kumar, Founder, MD & CEO of PayNearby, emphasized that equipping local retailers with tools for offering a diverse range of services, such as insurance, e-commerce, and lending, plays a crucial role in driving financial access and economic progress at the grassroots level. By offering these services, retail stores are not only providing convenient access to essential financial products but also helping to stimulate economic growth in semi-urban and rural communities.

Overall, the report highlights a promising shift towards digital payments and financial inclusion in Bharat. With UPI transactions continuing to grow, along with increased demand for credit products and insurance policies, India's digital retail stores are making a significant impact in improving access to financial services across the country. The increasing adoption of digital payments and financial solutions is set to continue its upward trajectory, ensuring that the benefits of financial inclusion reach more people in Bharat.

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