Unified Payments Interface (UPI) transactions in India experienced a significant increase of 5% month-on-month (MoM) in May 2024. The total number of transactions reached 14.04 billion, up from 13.30 billion in April, according to the National Payments Corporation of India (NPCI). The transaction volume for May stood at an impressive INR 20.45 lakh crore, reflecting a 4.1% rise from April’s INR 19.64 lakh crore.
Comparing these figures on a year-on-year (YoY) basis, the transaction count surged by a remarkable 49%, while the transaction volume increased by 37%. Notably, the total transactions processed by UPI surpassed the 100 billion mark last year, showcasing the exponential growth of this digital payment platform.
Earlier in the year, the Reserve Bank of India’s (RBI) Governor Shaktikanta Das highlighted that India accounts for nearly 46% of the world’s digital transactions, attributing this significant share to the widespread adoption of UPI. “The share of UPI in digital payments has reached close to 80% in 2023. At a macro level, the volume of UPI transactions increased from 43 crore in 2017 to 11,761 crore in 2023,” he stated. Total transactions processed by UPI in 2023 stood at 117.6 billion, marking a 60% YoY increase from 74 billion transactions in 2022. Additionally, the transaction volume surged over 40% YoY to INR 182.84 lakh crore during this period.
Amid this staggering growth, both the NPCI and the central government have implemented various measures to further bolster India’s position in the global payments landscape. Last year, IT Minister Ashwini Vaishnaw announced that India had signed memoranda of understanding (MoUs) with approximately 30 countries to expand UPI’s reach globally. Countries like Sri Lanka, Mauritius, Bhutan, Nepal,
the UAE, and Canada have already adopted India’s UPI payment model to varying extents.
In a significant move to expand UPI’s footprint, NPCI’s international arm, NPCI International Payments Limited (NIPL), recently signed an agreement with the Bank of Namibia to develop a UPI-like digital payments system for the African nation. This step underscores India’s ambition to position UPI as a global standard for digital payments.
The NPCI has been proactive in enhancing UPI’s capabilities by introducing several new features. One such feature is UPI Lite, designed to support low-value transactions, making everyday payments more convenient and efficient. Another innovative feature is UPI Lite X, which facilitates offline transactions, ensuring seamless payments even without internet connectivity. Additionally, “Hello! UPI” enables users to make payments through voice commands, further simplifying the user experience.
In terms of transaction costs, the NPCI is exploring an interchange fee structure that is potentially lower than that for credit card transactions, with charges estimated to range between 1% and 1.2% per transaction. This move could make UPI even more attractive for merchants and consumers alike.
Moreover, the payments regulator is re-evaluating its decision to impose a 30% market share cap on payment players providing UPI services by the end of 2024. This reconsideration reflects the dynamic nature of the digital payments ecosystem and the need for regulatory flexibility to foster innovation and competition.
The impressive growth of UPI transactions highlights the platform’s critical role in India’s digital economy. With continuous enhancements and strategic international partnerships, UPI is well on its way to becoming a global leader in digital payments. As India continues to spearhead digital transformation, the future of UPI looks promising, driving the nation towards greater financial inclusion and economic growth.
