Unified Payments Interface (UPI) transactions in India have witnessed a significant uptick, with a 5% month-on-month (MoM) increase in May, reaching 14.04 billion transactions compared to 13.30 billion in the previous month.
According to data from the National Payments Corporation of India (NPCI), the transaction volume for May reached INR 20.45 lakh crore, marking a 4.1% increase from April’s INR 19.64 lakh crore.
On a year-on-year (YoY) basis, UPI transactions saw a remarkable surge, with the transaction count skyrocketing by 49%, and transaction volume witnessing a substantial 37% rise.
It’s worth noting that the total transactions processed by UPI surpassed 100 billion last year, indicating the rapid adoption and growing reliance on digital payment platforms.
Earlier this year, Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted India’s dominance in global digital transactions, attributing it to the widespread adoption of UPI. He noted that UPI’s share in digital payments has surged to nearly 80% in 2023, with transaction volume escalating from 43 crore in 2017 to 11,761 crore in 2023.
In 2023 alone, total UPI transactions reached 117.6 billion, marking a 60% YoY increase from 74 billion transactions in 2022. Correspondingly, transaction volume surged over 40% YoY to INR 182.84 lakh crore during the same period.
Amidst this phenomenal growth trajectory, both NPCI and the central government have been actively bolstering India’s position in the global payments landscape. Last year, India signed memoranda of understanding (MoUs) with around 30 countries to expand UPI’s reach globally. Nations like Sri Lanka, Mauritius, Bhutan, Nepal, the UAE, and Canada have already embraced India’s UPI payment model to varying extents.
Recently, NPCI’s international arm, NPCI International Payments Limited (NIPL), inked an agreement with the Bank of Namibia to develop a UPI-like digital payments system for the African nation.
Furthermore, NPCI has introduced several new features such as UPI Lite for low-value transactions, UPI Lite X for offline transactions, and Hello! UPI for voice-enabled payments. Additionally, NPCI is exploring a revised interchange fee structure lower than that for credit card transactions, potentially ranging between 1% and 1.2% per transaction.
Meanwhile, the payments regulator is contemplating revising its decision to impose a 30% market share cap on payment players offering UPI services by the end of 2024, indicating ongoing efforts to foster a conducive environment for the burgeoning digital payments ecosystem in India.
