The much-reviled demonetisation must have one big supporter in National Payments Corporation of India.

Thanks to the nixing of high-value bank notes on November 8, 2016, NPCI’s mobile-only digital payment mechanism Unified Payment Interface (UPI) has gained currency, and how.

It was launched for seamless transaction of money on smartphone — just like sending an e-mail — with two-factor authentication. But a policy push elsewhere has given it a big boost.

The number of transactions on the UPI platform has surged over the last one year — from just over one lakh last September, it crossed one crore this July.


UPI has rapidly emerged an important mobile-only payment platform. Reserve Bank of India data on electronic payment systems, which was updated on August 1, show the numbers for mobile banking and UPI (both of which are mobile-only payment systems).

Mobile banking figures of five banks provided by the RBI show the number of transactions at 7.23 crore during November 2016, and at 6.02 crore this July.

However, the number of UPI transactions soared from three lakhs in November 2016 to 1.09 crore in July.

While launching the UPI pilot in April 2016, NPCI had hoped such trends as smartphone penetration and wider mobile data usage in the country would help boost the growth of this mobile-only digital payment system. UPI went live with 21 banks on August 25, 2016.


It remained a slow-starter. According to NPCI, the number of UPI transactions touched 1.22 lakh in September 2016.

Some banks launched their own UPI apps, too. Though many banks have made a mention about UPI in their annual reports, only a few have given numbers on UPI (see infographics).


Then came demonetisation, and the number of UPI-based transactions shot up. The launch of the UPI-based BHIM (Bharat Interface for Money) app on December 30, 2016, by NPCI gave a further thrust to the payment platform.

RBI data put the volume of UPI transactions at three lakh, 20 lakh and 42 lakh during November, December and January, respectively.

UPI usage seems to have gained further traction with the number of transactions crossing the one-crore mark in the last two months. UPI is currently being offered by 52 banks.

Recently, NPCI stated that the number of BHIM app downloads had crossed 1.6 crore. BHIM had an active customer base of 40 lakh as of June-end.

With the UPI completing a year in operation in about a fortnight, it is to be seen how the common user and merchant establishments, including private and government agencies, take it forward.