UPI Transactions Cross 20 Bn Mark In August

UPI transactions rose 2.8% month-on-month to 20.01 Bn in August, touching a fresh all-time high. On a year-on-year basis, the transaction count jumped 34%.

This is the second consecutive month when UPI transaction count touched a new high. In July, the number of transactions stood at 19.47 Bn.

However, in terms of value, UPI transactions saw a marginal 1% decline. The value of UPI transactions in August stood at INR 24.85 Lakh Cr as against INR 25.08 Lakh Cr in July. 

As per the National Payments Corporation of India’s data, the average daily transaction count rose to 645 Mn in August from 628 Mn in July.

The UPI landscape is dominated by PhonePe and Google Pay. In July, PhonePe and Google Pay continued their duopoly with 893 Cr and 692 Cr transactions processed by them, respectively. While NPCI is yet to release the app data for the month of August, it is expected that the two fintech giants will continue to hold their positions.

Vijay Shekhar Sharma-led Paytm also held on to its third spot, processing 136 Cr transactions in July. 

UPI has played a pivotal role in expanding India’s fintech segment, with a number of startups starting with providing UPI services before adding other products and services. The country’s fintech market is projected to grow to more than $400 Bn by 2028-29. 

The increasing adoption of UPI has also led to calls from industry players for levying merchant discount rate (MDR) for these transactions. While the Centre has repeatedly said that there would be no charges on UPI transactions, the central bank has indicated that it is open to levying MDR.

“We need a universally efficient system. As of now, there are no charges. The government is subsidising various players such as banks and other stakeholders in the UPI payments system. Obviously, some costs have to be paid,” RBI governor Sanjay Malhotra said at a media event last month.

The governor added that UPI’s financial sustainability depends on changing the system of free digital transactions to include minimal charges.

Meanwhile, with the rising transactions, there have also been a number of cases of UPI outages. Last month, the payments system faced connectivity problems, which the NPCI said was due to technical issues at a few partner banks.

Notably, amid a spate of UPI outages, finance minister Nirmala Sitharaman, in April this year,  asked the NPCI to reinforce UPI’s robustness and prevent future disruptions.