The Unified Payments Interface (UPI) transactions in July reached an all-time high at over 600 crore, the data released by the National Payments Corporation of India (NPCI) shows. A total of 338 banks and other financial institutions that offers UPI services clocked 630 crore transactions in July, up 7.16% month-on-month. That amounted to a value worth ₹10.6 lakh crore, up 4.76% on a month-on-month basis. On a YoY basis, the UPI transaction volume rose almost 100%, while in value terms, the transactions went up by 75%.
Launched in 2016, the UPI platform has become a bellwether real-time payments system. The NPCI data shows July recorded the highest ever UPI transactions in volume and value terms since 2016.
Prime minister Narendra Modi has termed this an "outstanding accomplishment". He said: "It indicates the collective resolve of the people of India to embrace new technologies and make the economy cleaner. Digital payments were particularly helpful during the COVID-19 pandemic."
In value terms, the UPI transactions have crossed the ₹10-lakh crore continuously since May. In the month of May, the UPI transaction value stood at ₹10,41,520.07 crore, while June recorded a UPI transaction value worth ₹10,14,384.31 crore.
UPI has emerged as one of the most popular payment methods in India, especially after the demonetisation of high-value currency notes in 2016 spurred digital transactions in the country.
The ecosystem is dominated by PhonePe, Google Pay, and Paytm, which accounted for 94.8% of UPI transactions in volume and 93% in value terms as of March 2022. To widen its reach, the UPI system has been leveraged to introduce UPI123Pay to facilitate the digital enablement of over 40 crore feature phone users in the country.
Considering the popularity of UPI in India, market regulator Securities and Exchange Board of India (SEBI) has also increased the limit of bids retail individual investors can place for public issues through Unified Payment Interface (UPI) to ₹5 lakh from the earlier limit of ₹2 lakh. The Reserve Bank of India has also explored the possibility of linking UPI with similar systems in other jurisdictions.
India’s UPI platform has been appreciated by top thinkers and policymakers. At a Fortune India event in New Delhi last month, Amitabh Kant, chief executive officer (CEO) of NITI Aayog, said the UPI has enhanced the digital payment culture in the country, putting it ahead of China and the U.S. by 27% in online payments. “The pace of digital transformation in India is rapid and in the last four years, UPI payment has done trillion dollar worth of transactions, which is more than what Mastercard has achieved in 44 years,” he added.
Appreciating the government schemes like Aadhaar and UPI, former RBI governor Raghuram Rajan had last month said they really made an impact on the ground. He said India started UPI in 2016, but the US Federal Reserve is working on it now in 2023, creating an equivalent to the UPI. “In some sense, even in high-tech payments, India has been ahead in some areas," he added.