Digital transactions grew 31% YoY in festive sale period, expenditure up 64%: PayU report

A PayU report, capturing the key digital payment trends on the company's platform, shows a 31 percent year-on-year jump in transactions during the recent festive sale period, and a 64 percent surge in the cumulative expenditure.

The 'Insights Report – Festive edition', released by PayU on November 15, also noted that there has been a "245 percent increase in expenditure and 130 percent increase in the number of transactions" between the pre-Covid festive period of 2019 and the post-pandemic period of 2022.

Close to 7 million digital transactions were processed in one day, during this festive season, as the date of sales announced by major brands had clashed, PayU said in a press release, citing the report's findings.

Credit cards were the most preferred mode of payment this season, it said, adding that "credit card users spent about 5 times more than debit card users in 2022 (total expenditure)".

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On average, a credit card user spent Rs 6,000 as opposed to a debit card user who spent Rs 2,500. Year-on-year, credit card transactions and expenditures grew 42 percent and 84 percent, respectively, the report claimed.

The growing appetite for credit was also reflected in the fact that credit repayment (i.e. personal loans for consumers and businesses) saw a 107 percent increase in expenditure and a 105 percent increase in transactions over the last festive season, it added.

Revenge tourism

Expenditure in the travel and hospitality sector, which is considered to be driven by revenge tourism, witnessed a 165 percent increase this festive season, the report said.

"Cabs showed a 121 percent increase in expenditure, while train bookings witnessed a 50 percent increase in expenditure and a 33 percent increase in average ticket size.

Airlines saw a 95 percent increase in average ticket size. Holiday packages saw a 70 percent increase in expenditure and 341 percent increase in average ticket size," the release noted.

UPI for small ticket items

The number of UPI transactions went up by 133 percent YoY and expenditure grew by 124 percent YoY, according to the report.

Interestingly, the average ticket size for UPI transactions has gone down marginally, by four percent, it said, suggesting that the mode of payment was being preferred for smaller payments.

"Consumers used UPI for small ticket items such as groceries, within city travel and entertainment, which could be the reason ticket size declined," PayU said.

The top five cities contributing to the highest number of transactions through UPI are Mumbai, Bangalore, Hyderabad, Chennai and Delhi NCR, it further added.

Digital entertainment

The report pointed out that digital transactions involving over-the-top media services or OTT went up by 175 percent, and expenditure increased by 80 percent during the festive season.

Gaming expenditure shot up by 20 percent during the period, it added.

However, expenses related to watching movies physically and attending on-ground events witnessed a decline in expenditure and transactions of 11 percent and 43 percent, respectively, the release stated.

Based on the insights shared in the report, "we are able to determine economic and industry-specific trends and whether these reflect broader market movements", Paulami Das, Director, PayU Payments said.

"We see that behaviors formed during the pandemic persist into the new normal with the preference for travel, digital entertainment and UPI continuing to increase significantly this festive season," Das added.