capital market payments: Capital market payments via UPI down 22% – News Air Insight

Kolkata: Digital transactions for capital market investments using the unified payments interface (UPI) declined 22% year-on-year for the past three months (June to August) ahead of the transition into a new UPI payment framework designed to curb frauds. The fall in volume may have also reflected a cautious investor approach to stocks.

Transaction values dropped to ₹1.51 lakh crore in the June-August period from ₹1.94 lakh crore in the corresponding period last year, data from NPCI showed, despite the overall surge in digital payments and adoption of UPI.

Volume saw a 9% dip over the same period-from 198 million transactions to 178 million. October last year saw the highest ever monthly capital market payments using UPI at ₹79,011 crore.

Market participants said investors slowed down UPI payments to brokers and mutual funds, ever since the Securities & Exchange Board of India announced the new payment system involving validated UPI handles and a fund-blocking mechanism for trading.

The new system with the UPI handle @valid will go live on October 1. The regulator mandated a “block funds” mechanism similar to the Application Supported by Blocked Amount (ASBA) for IPOs, which eliminates the need to transfer funds to the broker upfront.