Transaction volumes on India’s Unified Payments Interface (UPI) have likely crossed the historic mark of 10 billion monthly volumes for the month of August, making a significant milestone in India’s payments story. While the official transaction figures are yet to be released by the National Payments Council of India (NPCI), the umbrella body for UPI, the latest data released as of August 29, 2023 shows that volumes had crossed 9.88 billion by then.

Assuming the monthly run rate of 300 million plus daily transactions on UPI, the total volumes will likely exceed 10 billion for the month of August.

In July, UPI transaction volumes had crossed 9.96 billion. In value terms, total monthly transactions stood at Rs 15.34 lakh crores in July.

UPI crossed 1 billion monthly transactions for the first time in October of 2019, nearly three years after it was launched in 2016. The next billion came in another 12 months, when it touch 2.1 billion monthly transactions in October 2020, 3 billion plus by July 2021 and so on until it crossed 9 billion monthly transactions in May of 2023.

This latest billion will be the fastest UPI has clocked in its history, with August set to see 10 billion transactions- barely 3 months after the 9 bn mark was crossed.

THE RISE and RISE OF UPI

(Source: NPCI)

UPI saw a meteoric rise in popularity following the demonetisation of 2016 and the successive COvid-19 pandemic, which led to a sharp increase in use of digital payments in the country. Transactions made using UPI already account for more than 75 percent of all retail digital transaction volumes, and this figure is expected to go up even further.

“The UPI is expected to account for 90 percent share of retail digital transactions volume in the next five years, up from 75.6 percent in 2022-23,” the RBI Bulletin for June 2023 noted.

As the latest data available for July 2023 from the Reserve Bank of India, UPI saw the highest growth in transaction volumes year-on-year compared to any other payment system, including (RTGS) Real Time Gross Settlement, (NEFT) National Electronic Funds Transfer, (IMPS) Immediate Payment Service, (NETC) National Electronic Toll Collection, or (BBPS) Bharat Bill Payment System.

The table below highlights the annual growth seen across these systems.

Growth in Select Payment Systems: July 2023 (% YoY)

(Source: RBI)

“There were 996 crore Unified Payments Interface (UPI) transactions in July, totalling over Rs 15 lakh crore in value. Among the various prepayment options for online purchases, the UPI stands out as the most favoured mode (57 per cent), followed by credit cards (31 per cent), and other payment options such as wallets, net banking, and debit cards (12 per cent),” RBI noted in its August 2023 bulletin.

The government and regulator RBI have taken several measures to boost the use of UPI, easing transaction limits, linking it to RuPay Cards, allowing for interoperability across UPI payment apps, and even ensuring retail transactions made using UPI remain free for users.

India’s UPI story has caught global attention and earned India a place of pride in real time payment innovations, with a slew of countries tying up with India to facilitate payments via UPI. India and France recently reached an agreement to use UPI in France, months after India signed a similar agreement with Singapore. UPI (QR) is already acceptable in UAE, Bhutan, Mauritius and Singapore. The NIPL or NPCI International Payments Ltd, NPCI’s global arm, has also signed a deal with Liquid Group in 2021 to enable QR-based UPI payments’ acceptance in 10 countries across north & southeast Asia, incl Malaysia, Thailand, Philippines, Vietnam, Singapore, Cambodia, Hong Kong, Taiwan, South Korea, and Japan.

Worldline tied up with NIPL to expand the acceptance of Indian payment means across Europe. NPCI had also announced that non-resident Indians or NRIs from 10 countries will also be able to use UPI to send/receive money using their international numbers, including NRIs from Singapore, Australia, Canada, Hong Kong, Oman, Qatar, US, Saudi Arabia, United Arab Emirates, and United Kingdom.

NPCI now hopes that the daily transactions on the UPI platform can touch 1 billion in the next two-three years as UPI hits its full potential.

(Edited by : Anshul)

First Published:Aug 31, 2023 12:57 PM IST