The Unified Payments Interface (UPI) has clocked a record 6.28 Bn transactions to the tune of INR 10.62 Tn, as per the National Payments Corporation of India (NPCI) data. This is the highest ever number of transactions since the inception of the country’s flagship digital payments platform in 2016.
According to data compiled by NPCI, the number of transactions was up 7.16 per cent month-on-month (MoM) and the value increased by 4.76 per cent. While the volume of transactions almost doubled year-on-year (YoY), the value of transactions increased by 75 per cent.
Nearly three years after its launch, UPI reached 1 Bn transactions for the first time in October 2019. Thereafter, the next Bn followed in less than a year when UPI processed more than two Bn transactions in October 2020.
Thereafter, three Bn transactions were handled through UPI for the next ten months. In a span of three months, the digital payments gateway went from 3 Bn to 4 Bn transactions every month.
While the incremental one Bn transactions were achieved in just six months. The next incremental one Bn transactions were clocked within a period of six months.
Over the past two years, the use of digital payments in the country has seen a sharp increase due to the Covid-19 outbreak.
With the broader economy registering a recovery, UPI transactions are also increasing, with a few exceptions during the first two waves of the pandemic.
Besides, UPI processed over 46 Bn transactions worth over INR 84.17 Tn in FY22, surpassing the $1 Tn thresholds. Additionally, the digital payments platform completed 22.28 Bn transactions worth INR 41.03 Tn in FY21.
Thus, both the volume and the value of transactions doubled in a year, demonstrating the country’s rapid embrace of digital payments, particularly UPI.
The Reserve Bank of India’s (RBI) digital payments index (DPI) increased to 349.30 as of March 2022 from 304.06 in September 2021, reflecting swift adoption of digital payments across India. The DPI index, which was introduced in January 2021, shows the level of digitisation of payments countrywide.
Furthermore, the index was 153.47 in March 2019 and increased to 173.49 in September of the same year. It then increased to 207.94 in March 2020, then 217.74 in September same year, and then it rose to 270.59 in March 2021.
Within the next five years, UPI aims to clock in one Bn transaction per day. The decision of the Reserve Bank of India (RBI) permitting Rupay credit cards to be linked to UPI is anticipated to significantly increase both the volume and the value of transactions in the upcoming months.
Sharing his views at an event themed on the linkage of Rupay credit card and UPI, the chief executive officer (CEO), NPCI, Dilip Asbe said, “We are looking at how we can expand the market. The objective is how we can go back to the 250 Mn users and how the bank can start doing smaller credits. Also, we are looking at how the 50 Mn merchants can start accepting credit. We may have to take care of the smaller merchants and protect them from the MDR (merchant discount rate). The existing credit card servicing merchants can continue to pay.”
Having links with 330 banks, UPI is now the most widely used digital payment system in India, with State Bank of India (SBI) leading the pack with 162.5 Cr transactions followed by HDFC Bank (52.9 Cr transactions) and Bank of Baroda (38.3 Cr transactions).