India's Unified Payments Interface (UPI) transactions rose to 16.73 billion for December 2024, according to data collected from the National Payments Corporation of India (NPCI) website. This rise is killing the nation's toffee (candy) business.
The transactions rose 8 percent month-on-month (MoM) to its December level, compared with 15.28 billion transactions in November 2024.
India shopkeepers always had a “chutta nahi hai” (“no change available”) mindset. Before the UPI, shopkeepers gave shoppers candy or toffees using the narrative that they didn't have change available.
This practice has now nearly depleted as UPI is changing the financial landscape of India's payment system, and this transition to digital payment skips the requirement of shopkeepers to keep candy or toffee handy.
Commenting on this, a chartered accountant, Harshad Shah said, “Before UPI, shopkeepers would trade toffees for small change, claiming there was a shortage of coins. And, toffees were given to customers instead of small change,” said Shah.
Shoppers were now paying the exact bill using UPI applications. This meant that there was no need to carry change or ask for change in a transaction.
Citing the sales drop of major brands like Mondelez, Mars, Nestle, Perfetti, Parle & ITC, he said, “People paid the exact amount using UPI, with no scope for exchanging small change, ultimately eating up the daily sales of toffees.”
The UPI has transformed this consumer behaviour, and now, as people use digital payments more than cash payments, this new technology is impacting business in a completely different sector.
“Technology can impact any business,” said Shah, focusing on how no toffee-making company could have thought that a financial product could hamper their business.
PhonePe's share of UPI payments stood at 47.8 percent in November while Google Pay's share was at 37 percent. The two firms processed a combined 13.1 billion transactions in November. Google Pay's market share has been declining in recent months.
Other players in the UPI ecosystem include: Paytm, Navi, Cred, and Amazon Pay.
The UPI system is operated by the National Payments Corporation of India (NPCI). It allows users to make instant money transfers by linking banks with fintech apps.
(By arrangement with livemint.com)