India’s flagship digital payments platform – Unified Payments Interface (UPI) – processed over 7 billion transactions in October, a record high for the platform since its inception, on the back of festive season spending.
According to the latest data released by National Payments Corporation of India (NPCI), in October, UPI processed 7.3 billion transactions, worth Rs 12.11 trillion, a record high in terms of value of transactions. On a year-on-year basis, volume of transactions in October was up 73 per cent, while the value of transactions was up 57 per cent.
Volume and value of UPI transactions have continued to be on an upward trajectory for the last two years, apart from minor blips witnessed in some months because of pandemic related restrictions, mirroring the recovery in the broader economy and the increased adoption by consumers of digital modes of payments for their daily transactions.
UPI crossed 1 billion transactions in October 2019, almost three years after its launch in 2016. But, the next incremental billion came in under a year, when in October 2020, UPI processed more than 2 billion transactions. In the next ten months, UPI topped 3 billion transactions a month.
It took only three months for the payment platform to reach 4 billion transactions per month, from 3 billion. The incremental 1 billion transactions were achieved in just 6 months’ time. The journey from 5 billion transactions per month to 6 billion was traversed in just 4 months. In the next three months, transactions topped the 7 billion mark.
According to industry experts, the pandemic accelerated the adoption of UPI in the country in a major way, so much so that it has become the most preferred payments platform for a majority of the population. UPI transactions are up 488 per cent since the pandemic began, data shows.
In FY23 so far, the UPI has processed 44.32 billion transactions amounting to Rs 75 trillion. In FY22, UPI processed more than 46 billion transactions amounting to over Rs 84.17 trillion, thus breaching the $1 trillion mark. The payments platform is very likely to top the total transactions it has processed in FY22 in the first 8 months of FY23.
In FY21, it had processed 22.28 billion transactions, amounting to Rs 41.03 trillion.
The next target for UPI is to process a billion transactions a day in the next 3 – 5 years.
In UPI, the share of peer-to-merchants transactions has now overtaken the share of peer-to-peer transactions in volume terms, which augurs well for the platform going forward, especially with the RuPay credit card linkage to UPI, which envisages allowing consumers to pay merchants using their credit card through the UPI platform. Industry experts say this will give a huge boost to UPI transactions once the concept takes off.
There were concerns amongst critics that perhaps the growth in UPI will get impacted if the RBI introduces charges on UPI transactions, as it had pointed out in the discussion paper it had floated on the charges in payment systems. However, all speculations were put to rest by the government after it reiterated that UPI is a public good and that it is not considering levying any charges for UPI services.