UPI (Unified Payments Interface), which is in some ways the backbone of payment platforms like GooglePe and PhonePe that have transformed the Indian business transaction landscape in recent years, is on a record wave. It recorded 6.28 billion transactions worth Rs 10.62 lakh crore (trillion) for the month of July, according to data released by the National Payments Corporation of India (NPCI), which operates the platform. In the monthly comparison, the transaction volume rose 7.16% and the value increased 4.76%.
Prime Minister Narendra Modi praised UPI’s achievement of transactions surpassing 6 billion in July – the highest since its launch six years ago. “This is a remarkable achievement. It indicates the collective determination of the people of India to embrace new technologies and make the economy cleaner. Digital payments have been particularly helpful during the COVID-19 pandemic,” Modi said in a tweet.
UPI and its impressive numbers
This is a remarkable achievement. It indicates the collective determination of the people of India to embrace new technologies and make the economy cleaner. Digital payments have been particularly useful during the COVID-19 pandemic. https://t.co/roR2h89LHvAugust 2, 2022
UPI is currently the most popular digital payment system in India, with links to 330 banks led by the State Bank of India (SBI) (162.5 Cr transactions), followed by HDFC Bank (52.9 Cr transactions) and Bank Of Baroda (38.3 Cr transactions). UPI crossed 1 billion transactions for the first time in October 2019, nearly three years after its launch. The next billion came in less than a year, as in October 2020, UPI processed over 2 billion transactions. It passed the 5 billion mark in March of this year. And now it has crossed the six billion threshold.
UPI-based transactions are the most popular across the country. Reflecting the rapid adoption of digital payments in the country, the Reserve Bank of India (RBI) Digital Payments Index (DPI) rose to 349.30 in March 2022 from 304.06 in September 2021. Released in January 2021 , the DPI index indicates the extent of payment digitization across the country. In March 2019 the index stood at 153.47 and in September 2019 it rose to 173.49, followed by 207.94 in March 2020, 217.74 in September 2020 and 270.59 in March 2021 .
NPCI is now going international to bring the local payment system to countries like Nepal, UAE, Japan and China. This means that UPI transactions are possible in these countries.
So what does it do?
It’s practical and convenient
The Covid-19 pandemic has understandably fueled the acceleration of digital payments adoption. This is where UPI transactions took center stage. Credit and debit cards, while still easy and practical, are still seen as a tool for urban and informed individuals. UPI-based transactions, mostly done via smartphone, are more egalitarian, so to speak. It is as popular in cities as it is in villages and towns. Its ease of use and convenience is hard to beat, and this is at the heart of its popularity.
UPI’s goal is to process one billion transactions a day over the next five years. The RBI’s decision to allow the linking of Rupay credit cards to the UPI will further boost their widespread use.
NPCI was incorporated in 2008 as a comprehensive organization for the operation of retail payments and settlement systems in India. It started UPI in 2016 and also operates other payment features such as RuPay Card, Immediate Payment Service (IMPS), Bharat Interface for Money (BHIM), Fastag and Bharat BillPay. NPCI also signed a Memorandum of Understanding (MoU) with France’s Lyra Network for the acceptance of UPI and RuPay cards in the country.
As countries and usage increase, UPI numbers are expected to increase. More records are waiting to be broken.