UPI leads India’s digital payments revolution with 74% growth in 5 yrs

Over the past five years, India's Unified Payments Interface (UPI) has experienced a meteoric rise, reshaping the landscape of digital transactions. The volume surged from 1078.75 crore in CY 2019 to a staggering 17,220.80 crore in CY 2024, a CAGR of 74.03%. The value of UPI transactions skyrocketed from ₹18.37 lakh crore to ₹246.83 lakh crore during the same period, boasting a CAGR of 68.14%, according to the Reserve Bank of India’s (RBI) latest Payment System Report 2024.

Calling it a "game changer in the payments arena", the RBI report says UPI, which is an instant payment system that facilitates both inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions, has seen the highest per cent share in P2M volume for ‘Food and Beverages’, followed by ‘Retail and Shopping’ and then ‘Utilities and Services’.

Further, while the share of ‘Food and Beverages’ increased from 21.8% to 49.1% in total UPI P2M transactions between June 2021 and December 2024, the share of ‘Retail and Shopping’ has declined from 39.5% to 22.3%. On the other hand, the share of ‘Utilities and Services’ has declined from 18.3% to 10.4% during the same period, the report suggests.

Among trends in other payment systems, the RTGS system has shown significant growth in the last five years as the volume doubled from 14.82 crore in CY-2019 to 29.53 crore in CY-2024, with a CAGR of 14.78%. The value of RTGS transactions, on the other hand, increased by 39.6% from ₹1,388.67 lakh crore in CY-2019 to ₹1,938.21 lakh crore in CY-2024, with a CAGR of 6.90%.

Over the past five years, the NEFT system has surged more than threefold, from 262.2 crore to 926.8 crore, a 28.73% CAGR. The transaction value has grown nearly 1.9 times, from ₹232.97 lakh crore to ₹432.79 lakh crore, registering a CAGR of 13.19%.

The RBI report says in contrast to UPI, the share of other payment systems like RTGS, NEFT, IMPS, credit cards, debit cards, etc. in digital payments volume declined from 66% to 17% in the past five years.

Overall, the RBI says India’s digital payments ecosystem has seen exponential growth in the last decade, with transaction volumes increasing 94 times since 2013. The country recorded over 20,787 crore digital transactions valued at ₹2,758 lakh crore in the calendar year 2024 (CY-2024), a huge surge from 222 crore transactions worth ₹772 lakh crore in CY-2013.

The RBI report highlights that retail digital payments have been a key driver of this growth. Retail transactions grew from 162 crore in FY 2012-13 to 16,416 crore in FY 2023-24, marking a staggering 100-fold increase over 12 years, an indication of the rapid adoption of digital payment systems in India.

In the last five years alone, says the RBI, adding that digital payments have grown 6.7 times in volume and 1.6 times in value, recording a CAGR of 45.9% in volume and 10.2% in value. India is increasingly shifting toward a cashless economy, says the report, attributing the rapid adoption to digital platforms, government initiatives promoting financial inclusion, and the proliferation of mobile internet and affordable smartphones.