UPI Transactions Continue To Rise, Cross 11 Bn Mark In October

Digital payments in the country continued their growth momentum in the month of October, with the Unified Payments Interface (UPI) transactions crossing the 1,100 Cr mark for the first time.

UPI recorded over 1,141 Cr transactions in October, with transaction value of INR 17.16 Lakh Cr, according to data from the National Payments Corporation of India (NPCI).

On a month-on-month basis, transactions rose 8% from 1,056 Cr in September, while value of the transactions grew 8.6% from INR 15.8 Lakh Cr.

On a year-on-year basis, UPI achieved 55% increase in transaction volume and a 42% growth in transaction value.

“Over 11 Bn UPI transactions were done in October 2023! People are making seamless payments from mobile in real-time with UPI,” Ministry of Electronics and Information Technology (MeitY) said on X (formerly Twitter).

UPI reached the 1,000 Cr transactions milestone for the first time in August and maintained the momentum in September.

In September this year, PhonePe maintained its leading position in the UPI market with 497.2 Cr transactions valued at INR 7.7 Lakh Cr. Google Pay, Paytm, and CRED were behind PhonePe in terms of monthly UPI transactions, highlighting the competitive landscape in the Indian digital payments sector.

In an effort to further increase the adoption of UPI both in India and on a global scale, the Indian government has been working on expanding the functionalities of the payments interface. A significant development in this regard was the Reserve Bank of India’s (RBI) decision to allow scheduled commercial banks to extend credit lines to their customers through UPI.

The NPCI has set its sights on achieving 100 Bn monthly transactions in the near future, underlining its ambitious growth plans. As part of this, it recently unveiled diverse UPI innovations at the Global Fintech Fest 2023, including credit line access, NFC-based offline payment options UPI LITE X and Tap & Pay, and conversational payment solutions Hello! UPI and BillPay Connect.

UPI has also gone global, extending its reach to countries like France, Bhutan, Nepal, the UAE, and Canada. India is also in discussions with New Zealand and various South American and African nations to introduce the UPI payment interface in those regions, indicating its growing international influence in the digital payments space.

However, there have been some concerns about the UPI. Despite UPI’s remarkable growth, it has not proven to be a lucrative revenue source for fintech companies. The cost of UPI transactions is shared by acquirer apps and banks, adding to the financial burden for payments apps.

Recently, Mastercard chief financial officer Sachin Mehra called UPI an ‘incredibly painful experience’ for ecosystem participants and raised questions over its commercial viability.