UPI payments scale 10 billion summit in August
On March 13, union minister of state for finance, Bhagwat Kisanrao Karad, said in a written reply at the Lok Sabha that proliferation of digital payments systems such as Aadhaar Payment Bridge, Aadhaar-enabled Payment System (AePS), UPI and UPI Lite saw “a growth of more than 200% during four years since FY19."
Unified Payments Interface, or UPI, that has revolutionised the payments system in India and is being pushed for adoption by other countries as well, has surpassed the 10 billion transaction mark in August for the first time, according to National Payments Corporation of India (NPCI).
The total number of UPI transactions stood at 10.24 billion. The transaction value was at Rs 15.18 trillion (lakh crore). Significantly, the figure pertained to August 30 and therefore, is expected to cross Rs 16 trillion in the full month.
Incidentally, the total UPI transaction value recorded in August was more than 74% of the total GSDP of India’s largest state Uttar Pradesh in FY23 and more than 42% of the GSDP of wealthiest state Maharashtra in the last financial year.
Transactions on UPI have galloped by an astounding 50% plus rate year-on-year. In 2022 the month of August registered 6.58 billion monthly transactions.
The number of transactions came tantalisingly close to the 10 billion mark in July 2023. It stood at 9.96 billion transactions after the month of June witnessed a marginal sequential drop from May.
UPI crossed the landmark of 1 billion monthly transactions for the first time in October 2019. Therefore, it took less than four years for its adoption to grow four-fold.
The growth of UPI has been attributed to mainly its convenience and security. With its fast adoption, it has also resulted in the need for the common man to carry less and less cash. Recently, a touring federal minister of Germany was seen trying out the UPI to pay for vegetables from a roadside vendor in Bengaluru. The German embassy said on social media that he was impressed by the experience.
Industry personalities said that UPI has not run out of steam and can easily grow further. “At 10 billion, there is still a lot of room for UPI transactions to grow. The data shows that UPI’s peer to merchant (P2M) transactions are growing at a pace of over 100% YoY, and have a higher share than peer to peer (P2P) transactions. Over time, P2M transactions will drive UPI transactions growth, and it will be no surprise if monthly UPI transactions hit 20 billion in the next 18-24 months,” said Sunil Rongala, senior vice-president and head of strategy for India at payments services firm Worldwide.
On March 13, union minister of state for finance, Bhagwat Kisanrao Karad, said in a written reply at the Lok Sabha that proliferation of digital payments systems such as Aadhaar Payment Bridge, Aadhaar-enabled Payment System (AePS), UPI and UPI Lite saw “a growth of more than 200% during four years since FY19.”
The minister also said that the growth was triggered by Meity’s incentive scheme to promote RuPay debit cards and “low-value BHIM-UPI transactions.” A total quantum of ₹2,600 crore was earmarked for the scheme for FY23.
Disaggregating distribution of UPI transactions by apps, Indian fintech platform PhonePe emerged as the market leader in June 2023, accounting for more than 47% of all UPI transactions. Google Pay (35%) and Paytm (14%) came second and third respectively.