Unified Payments Interface (UPI) ended calendar year 2021 (CY21) with record high transactions in volume and value terms. According to the data released by the National Payments Corporation of India (NPCI), in December, UPI recorded 4.56 billion transactions, worth Rs 8.27 trillion.
UPI is an instant real-time payment system developed by the NPCI facilitating inter-bank, peer-to-peer and person-to-merchant transactions.
After reporting a marginal dip in November, UPI transactions bounced back in December, with the volume of transactions growing at 9.09 per cent month-on-month (MoM) and value of transactions growing at 7.6 per cent. On a year–on–year basis, in December, the volume of transactions more than doubled, while the value of transactions reported 99 per cent growth.
In October, UPI had reported record-high transactions of 4.21 billion, worth Rs 7.71 trillion. It was the first time UPI transactions topped the $100-billion mark in a month.
In CY21, UPI had processed more than 38 billion transactions, amounting to Rs 71.59 trillion. In 2021-22 (FY22) so far, it has processed more than 31 billion transactions, surpassing the transactions processed in 2020-21 (FY21), a Business Standard report added.
The report further explained that after being launched in 2016 UPI has witnessed a tremendous adoption which was further accelerated due to the COVID19 pandemic. It crossed 1 billion transactions for the first time in October 2019. The next 1 billion came in under a year. In October 2020, UPI processed more than 2 billion transactions for the first time. Consumers relied on digital payments during the pandemic. The digital mode of payment gained popularity amongst consumers and it took only three months for the payment platform to reach 4 billion transactions per month, from 3 billion. And, for three consecutive months (October, November, and December), UPI has processed 4 billion transactions.
In FY21, the platform processed around 22 billion transactions. The goal is to touch 40-42 billion transactions in FY22, NPCI’s Chief Executive Officer Dilip Asbe had said. NPCI is the umbrella organisation for retail digital payments in India.
According to a report by Jeffries, in FY22, UPI accounts for 50 per cent of retail digital payments in the country and is almost 4.5x of debit and credit card transactions. The report said digital payments are annualising at $2 trillion in India, with UPI being the largest driver, followed by cards and mobile wallets.
Experts have suggested that the next phase of growth in UPI will come from the AutoPay feature, which allows recurring payments of up to Rs 5,000. UPI AutoPay has seen massive traction in the past few months as recurring payments through cards witnessed disruptions while transitioning to the Reserve Bank of India’s (RBI’s) new guidelines on e-mandates.
Recently, the RBI had said since half the transactions on the UPI platform are of small value, it will enable them through an “on-device” wallet in UPI applications, to help reduce stress on the banking system and make the transaction process even simpler. Further, the RBI has also said it will launch UPI-based digital payment solutions for feature phone users, who are in excess of 440 million.
Last year in the month of August NPCI International Payments Ltd (NIPL, International arm of National Payment Corporation of India) had collaborated with BENEFIT, Bahrain’s leading company in Fintech and electronic financial transactions service to enable RuPay acceptance at ATMs and Point of Sale (PoS) terminals across Bahrain.