UPI Transaction Value Touches INR 13 Lakh Cr Mark In Jan, MoM Growth Slows To 1.3%

Carrying the momentum gained towards the end of last year, the Unified Payments Interface (UPI) recorded 803 Cr transactions worth INR 12.98 Lakh Cr ($157.85 Bn) in January 2023. Both numbers are a new record for the government’s digital payments network.

According to the National Payments Corporation of India’s (NPCI’s) data, UPI recorded a growth of 1.3% in transaction value in January 2023 from INR 12.82 Lakh Cr in December 2022. At the same time, UPI recorded a month-on-month (MoM) growth of 2.65% in terms of transaction count, which stood at 782 Cr in December 2022.

While this month’s app-wise breakdown is yet to be released by the NPCI, PhonePe, Google Pay and Paytm were the top three UPI apps in December 2022. Together, the three apps accounted for over 90% of the transaction count and transaction value at the time.

Similarly, the NPCI has not released the person-to-person (P2P) and person-to-merchant (P2M) breakdown for UPI for January 2023. However, P2P transactions accounted for more than 77% of the total payments made in December 2022. The trend is expected to continue in January 2023 as well, according to industry experts.

On a year-on-year (YoY) basis, the UPI transaction count grew 74% from 461 Cr in January 2022, while transaction value rose 52% from INR 8.31 Lakh Cr in the year-ago month.

The NPCI has set a target to achieve a billion transactions a day in the next five years As of January 2023, the daily transaction volume averaged around 2.5 Lakh per day.

Last year was the strongest year for the UPI, with nearly 382 banks processing 7,404.45 Cr transactions worth INR 125.95 Lakh Cr in 2022. Interestingly, the total UPI transaction value accounted for nearly 86% of India’s GDP in FY22. The transaction count in 2022 translated to around 2,348 UPI transactions per second.

Over the past few quarters, the growth of UPI has slowed down considerably. The last time the payments network recorded double-digit growth in any metric was in March 2022, when it saw a 16% jump in transaction value and a 20% jump in transaction value.

Industry experts say that a slowdown in the growth of UPI transaction value and count indicates that the digital payments ecosystem is approaching maturity, which, they believe, is a good sign. However, with the upcoming credit card linkage, the UPI ecosystem might just get a second wind.

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