The Unified Payments Interface (UPI) network witnessed remarkable growth in July 2023, setting new records in both transaction volume and value. After a minor dip in June, UPI transactions surged by 44% year-on-year (YoY) and reached a staggering ₹15.34 lakh crore. The number of transactions also hit a new high of 996 crore, a significant increase of 58% compared to July 2022. Market participants predict that UPI transactions will continue to grow, possibly crossing the 1,000-crore mark in the current quarter.
Unprecedented Growth in Volume and Value:
- UPI transactions saw a remarkable 44% YoY growth in value, reaching ₹15.34 lakh crore in July 2023.
- The number of transactions skyrocketed by 58% YoY, recording an all-time high of 996 crore during the month.
- The growth in the value of UPI transactions has consistently exceeded 40% YoY, while the volume has remained above 50% YoY.
Impressive Performance in FY23:
- In the fiscal year 2022-23, the UPI platform processed a staggering 8,376 crore transactions amounting to ₹139 lakh crore, showcasing its robust performance.
- This represents a significant surge compared to FY22, where UPI processed 4,597 crore transactions worth ₹84 lakh crore.
Driving Retail Digital Payments:
- UPI has been a key driver in the growth of retail digital payments, achieving a Compound Annual Growth Rate (CAGR) of 50% in volume and 27% in value between FY17 and FY22, as reported by RBI’s annual report for 2022-23.
Digital Payments Index and Fintech Adoption:
- The central bank’s Digital Payments Index, measuring the level of digitization of payments in India, rose to 395.57 in March 2023, indicating the country’s increasing reliance on digital transactions.
- The Economic Survey for 2022-23 revealed that UPI transactions grew at an average rate of 121% in value and 115% in volume between FY19 and FY22.
- India boasts an impressive fintech adoption rate of 87%, surpassing the global average of 64%, securing the country the third spot in digital payments, behind the US and China.
Future Projections and Dominance of UPI Payments:
- A report by PwC India suggests that UPI transactions are projected to surpass 100 crore transactions per day by FY27, indicating sustained growth in the future.
- UPI payments are expected to dominate the retail digital payments landscape, accounting for an impressive 90% of total transaction volumes over the next five years.