UPI Targeting 1 Bn Daily Transactions In Next 5 Years: FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman said that the UPI would target one billion daily transactions in the next five years while speaking at an event organised by the Federation of Indian Chambers of Commerce & Industry (FICCI).

As per the FM, in July 2022, UPI processed 6.28 Bn transactions worth INR 10.62 Lakh Cr, 7% higher than June. “UPI target is to cross 1 billion transactions per day in next 5 years,” she said. 

Therefore, UPI processed about 202.58 Mn transactions per day on average in July 2022. Over the next five years, the government is looking to increase this number by around 394%.

UPI processed 6.58 Bn transactions worth INR 10.73 Lakh Cr in August 2022, slightly more than July 2022 figures. Recently, UPI has come under increasing regulatory pressure, as the government looks set to enforce the market share cap from January 2023 onwards.

The move is being resisted by payment aggregators, who have requested the government to give some more time for implementation. Since payment aggregators are asking for a delay of three to five years, the National Payment Corporation of India (NPCI) has reached out to the government and industry stakeholders to understand the implications of such a delay.

Speaking at the same event, the finance minister said that the future of fintech will be volatile, uncertain, complex and ambiguous (VUCA) and there is a sense of urgency with which the country needs to plan. She added that technology adoption is very high across the country, calling the digital adoption by Indian citizens ‘amazing’.

Speaking of technologies that will impact fintech, Sitharaman said that the role of artificial intelligence (AI) will be important. “I see a big role for AI in the fintech sector in the detection of fraud, crime and accessing the risks. We will have to ensure personal data security, national and cyber security in our planning,” said Sitharaman.

Sitharaman also said that banking and related services will play a bigger role in the future of fintech. She added that account aggregators will prove crucial, stating that the account aggregator system has been adopted by 21 banks.

On fintech startups in the country, Sitharaman said that there is a visible link between startups, fintech and private equity. “Private equity is pushing them (startups) quickly in the path of progress,” she said. There are more than six thousand active fintech startups in the country, including 22 unicorns.

Yesterday (September 20), Prime Minister Narendra Modi also spoke about fintech at an event organised by NPCI. He said that innovation directed at inclusion has led to the country’s global rise in the fintech startup space as a hub of investment.

At the same event, Reserve Bank of India (RBI) Governor Shaktikanta Das launched three new fintech initiatives. These include RuPay credit cards on the UPI network, a low-value transaction-focused solution UPI LITE and Bharat BillPay Cross-Border Bill Payments.