Recent data from the National Payment Corporation of India (NPCI) has revealed that India recorded digital transactions worth over US$100 billion in value via unified payments interface (UPI) in October. NPCI is an umbrella organisation for operating retail payments and settlement systems owned under the country’s central bank, the Reserve Bank of India (RBI). UPI is the government’s instant real-time payment system that facilitates inter-bank transactions. The reason for the surge has been attributed to festive shopping across e-commerce platforms, a rise in vaccination rates, and the loosening of COVID-19 restrictions. The data reveals that the number of UPI transactions was 4.2 billion in total. The figures mark an all-time high on both counts for the five-year-old payments channel.
In September, the NPCI recorded 3.65 billion UPI transactions. Currently, PhonePe, Google Pay, and Paytm are the leaders in the digital payments space. According to a news report, UPI has passed several significant milestones since its launch in 2016. It crossed a billion transactions for the first time in October 2019, and the next billion came in under a year. Since the start of 2021, the monthly transaction value has grown by close to 79%. The number of transactions, meanwhile, have increased by more than 83% from 2.3 billion in January. Another report showed that in August, the UPI hit another record: 3.24 billion transactions processed in August, a 15.7% increase from June when the platform recorded 2.8 billion transactions. Meanwhile, other modes of digital payments also recorded a sharp surge in October. Immediate Payments Service (IMPS) also touched an all-time high both in terms of number and value of transactions. It clocked 430.67 million transactions in the month.
NPCI was incorporated in 2008 and has created a robust payment and settlement infrastructure in the country. It has changed the way payments are made in India through a bouquet of retail payment products such as UPI, RuPay, Immediate Payment Service (IMPS), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC Fastag), and Bharat BillPay. NPCI also launched UPI 2.0 to offer more secure and comprehensive services to consumers and merchants. NPCI brings innovations in the retail payment systems through technology and is working to transform India into a digital economy. It facilitates secure payments solutions with nationwide accessibility at minimal costs to attain India’s target to be a fully digital society.
NPCI is looking at US$1 trillion worth of transactions through UPI on an annual basis, as India has witnessed significant progress in the digital payments ecosystem. Last year, the country processed 25.5 billion real-time payments transactions, followed by 15.7 billion in China, 6 billion in South Korea, 5.2 billion in Thailand, and 2.8 billion in the UK. By 2025, digital payments in India could account for 71.7% of the total payments volume, leaving cash and cheques at 28.3%. Last year, the transaction volume share in the country stood at 15.6% and 22.9% for instant payments and other electronic payments, respectively. Paper-based payments had a considerable share of 61.4%. More than 70.3 billion real-time payment transactions were processed globally last year, a surge of 41% compared to the previous year, as the COVID-19 pandemic dramatically accelerated trends away from cash and cheques towards greater reliance on real-time and digital payments.
