NPCI Planning For Another 300 Mn UPI Users

The National Payments Corporation of India (NPCI) is reportedly planning to onboard 200-300 Mn new users into its Unified Payments Interface (UPI) fold, as a part of its effort to further boost financial inclusion in underserved segments.

A Bloomberg report, citing NPCI managing director Dilip Asbe, said that the move to add new users will include various initiatives such as delegated accounts for children and household staff.

Besides, NPCI is also focusing on expanding UPI’s multilingual and conversational chat features to widen access, he added. 

This comes at a time when homegrown UPI has more than 350 Mn active users. As per NPCI data, UPI transactions jumped 13.6% in March to touch an all-time high of 18.30 Bn from 16.11 Bn in the preceding month. This transaction count of 18.30 Bn accounted for a total amount of INR 24.77 Lakh Cr in March.

While the digital payment landscape is organically evolving, compelling more people to use UPI, the government is also aggressively working towards making UPI a global phenomenon.

It has taken several initiatives including RBI partnering with central banks of Malaysia, Philippines, Singapore, and Thailand to link UPI with their fast payment systems to enable cross-border payments. Last month, India’s ambassador to Qatar said that UPI is set for a “full rollout” in the Middle Eastern nation “soon.

With UPI going global, the Centre is equally focusing on increasing its adoption domestically.

Last month, the Union Cabinet approved an ‘incentive scheme’ with an estimated outlay of INR 1,500 Cr to promote low-value BHIM-UPI transactions among small merchants.

The central bank also allowed NPCI to adjust transaction limits for person-to-merchant (P2M) payments, in consultation with banks and other stakeholders to accommodate higher-value transactions in select merchant categories.

The Other Side Of UPI In India

While UPI was once a sacred concept and needed incentives to be widely adopted, the situation is surely not the same anymore. 

Currently, the Payment Council of India (PCI) is pushing the government to bring back the Merchant Discount Rate (MDR) and charge large merchants on UPI transactions above INR 2,000. 

The Merchant Discount Rate (MDR) is the fee charged to merchants by banks or payment service providers for processing digital transactions through UPI.

In 2020, the fee was brought down to zero to promote digital payments in the country. However, with UPI becoming the primary mode of retail payments, PCI wants reconsideration of zero MDR on UPI and RuPay debit card transactions.

The industry body, which counts Airtel Payments Bank, Amazon Pay, Google Pay, Cashfree, and Jio Payments Bank as its members, wrote a letter to prime minister Narendra Modi regarding the issue.

Besides, UPI also saw frequent network failures in the recent weeks. On April 12 (Saturday), more than 2,387 users flagged issues regarding UPI failure.

Yesterday, NPCI held a meeting with major banks and UPI apps to discuss recent outages in the system. During the meeting, NPCI urged banks and UPI players to be cautious when commenting publicly on the outages.