The Unified Payments Interface (UPI) network breached the milestone of 1,000 crore transactions per month in August 2023, processing a record 1,058 transactions. The platform had crossed 900 crore transactions per month in May 2023.

The number of transactions were higher by 6.2 per cent from the previous month, and 61 per cent compared to August 2022, according to data by the National Payments Corporation of India (NPCI).

In terms of value of transactions too, the UPI platform touched a new record high, processing transactions worth ₹15.76-lakh crore during the month. The transaction amount was 2.7 per cent higher month-on- month and 47 per cent compared with the year ago period.

“As we approach the festive season, it’s evident that UPI transactions are poised to take centre stage,” Rahul Tandon, Chief Product Officer, Safexpay said, adding that this will further cement UPI’s pivotal role in financial transactions through emerging prospects such as AI and voice-enabled transactions.

Year-on-year growth in UPI transactions has consistently remained over 40 per cent for the value of transactions and above 50 per cent for volume of UPI trades. In July, the number of transactions were 58 per cent higher y-o-y, and value of transactions was 44 per cent higher.

In FY23, the UPI platform processed a total of 8,376 crore transactions aggregating ₹139 lakh crore, compared with 4,597 crore transactions worth ₹84 lakh crore in FY22.

Expanding UPI’s horizons

“From the launch of UPI123 for offline payments to the integration of credit card linkage for broader payment options, as well as to enabling investors to use UPI ID as a payment option while subscribing for IPO, each step has expanded UPI’s horizons,” said Mandar Agashe, Founder and MD, Sarvatra Technologies, adding that features such as conversational interfaces have enhanced convenience and adaptability.

UPI-led retail digital payments grew at a CAGR of 50 per cent in volume and 27 per cent in value, between 2016-17 and 2021-22, according to RBI’s annual report for 2022-23. 

The central bank’s Digital Payments Index, a measure of the extent of digitisation of payments across the country, rose to 395.57 in March 2023 from 377.46 in September 2022 and 349.30 in March 2022.

The number of UPI users has increased to 33 crore from 25 crore over the last six months, aided by better telecom infrastructure and smartphone penetration, said Mohit Bedi, co-founder and CBO, Kiwi (a credit on UPI platform).

“In this context, ‘Credit on UPI’ emerges as a pivotal growth enabler,” he said, adding that 35-40 per cent UPI transactions on the platform are credit card-based, with average card spends at ₹18,000-22,000.

UPI transactions are expected to breach 100 crore transactions per day by FY27, as per a report by PwC India, which projects UPI to dominate the retail digital payments landscape, accounting for 90 per cent of total transaction volumes over the next five years.