UPI, Insurance Adoption See Significant Growth In Rural India: Report

UPI transactions at retail stores in semi-urban and rural areas have risen by 33% this year, underscoring the rapid adoption of digital payments, according to a new report by PayNearby, a branchless banking and digital network provider.

The report also highlights a significant growth in the insurance sector, with insurance policy purchases and premium collections seeing a 127% surge in transaction volume. New customer adoption in the insurance space grew 96% during the year, reflecting a strong shift towards digital financial services.

"The data highlights the role digital retail stores play in overcoming the challenges of insurance penetration across Bharat," the report noted.

The findings are based on real transaction data from over 1 million small retailers, including mobile recharge outlets, and other financial service providers in rural and semi-urban regions of India. The analysis compares business data from January to November 2024 with the same period in 2023.

The report, Retail-O-Nomics, stated that there has been an impressive 297% volume rise across credit products, including business loans, gold loans, personal loans, and revolving credit in rural and semi-urban areas.

This significant uptick reflects a growing awareness and demand for credit solutions at the grassroots level, it said.

However, micro ATM and Aadhaar Enabled Payment Systems cash withdrawals saw a decline in 2024. Both transaction volumes and the average cash withdrawal per transaction saw a slight decline, with the latter dropping from Rs 2,624 in 2023 to Rs 2,482 in 2024, the report said.

AePS withdrawals surged 35-45% during DBT releases, particularly under schemes like PM Kisan Yojana, compared to the rest of the year. "Cash withdrawals in Jammu and Kashmir recorded an impressive growth of 58% in value and 74% in volume," the report said.

"By equipping local retailers with tools to offer diverse services like insurance, e-commerce, and lending, we are empowering them to become key enablers of financial access and economic progress at the grassroots," said Anand Kumar Bajaj, founder, managing director and chief executive officer.

PayNearby is a branchless banking and digital network that operates on a B2B2C model. It has more than 10 lakh retail touchpoints comprising kirana stores, medical shops, travel agents and others.

(With Inputs From PTI)