India’s Unified Payments Interface (UPI) processed a record 7.82 billion transactions in December, worth a total of INR 12.82tn ($174.6bn). This represents an increase of 7.12% in volume and 7.73% in value compared to November. On a year-on-year basis, volume and value increased by 71% and 55% respectively.
Rapid Growth of UPI in Last Two Years:
- In 2022, UPI processed over 74 billion transactions worth INR 125.94tn. In 2021, it processed 38 billion transactions worth INR 71.54tn.
- This represents a YoY increase of 90% in volume and 76% in value.
- UPI reached 1 billion transactions in October 2019, 2 billion in October 2020, and 3 billion in January 2021.
Shift from P2P to P2M Transactions:
- UPI was initially used mostly for P2P(Person-to-person) transactions, but has seen a significant shift towards P2M(Person-to-merchant) transactions in recent years.
- It is now the most popular payment method for P2M transactions in terms of volume.
- The adoption of the RuPay credit feature on UPI by larger credit issuers, including HDFC Bank and three public sector issuers, is expected to boost UPI transactions further.
NPCI’s Ambitious Target of One Billion Transactions Per Day:
The National Payments Corporation of India (NPCI), which manages and operates UPI, has a target of one billion transactions per day. NPCI hopes to achieve this within the next three to five years.
What Is National Payments Corporation of India (NPCI):
It is an umbrella non-for-profit organization that operates the retail payments and settlement systems across India. It was founded in December 2008. It has been registered under Section 8 of Companies Act 2013. The organisation was established by Reserve Bank of India and Indian Banks’ Association. It is owned by a consortium of major banks.
What Is Unified Payments Interface (UPI):
It is an instant real-time payment system which has been developed by National Payments Corporation of India. This interface provides for the inter-bank transactions. It is regulated by the Reserve Bank of India. Around 207 banks are available on UPI, as of December 2020, that accounts for the transaction of 2334.16 million monthly.