UPI Transactions Drop 6.6% MoM In November

The Unified Payments Interface (UPI) transactions dropped 6.6% month-on-month (MoM) to 15.48 Bn in November. The number of transactions processed on UPI stood at 16.58 Bn in the previous month. 

According to data released by the National Payments Corporation of India (NPCI), the total UPI transactions processed in November amounted to INR 21.55 Lakh Cr, compared to INR 23.50 Lakh Cr processed in the previous month, representing an 8.3% decline.

On a year-on-year (YoY) basis, the volume of UPI transactions surged by 37%.

In terms of UPI market share, fintech giants PhonePe and Google Pay continue to dominate the ecosystem, holding 48.4% and 37.3% market shares, respectively, as of August.

This development coincides with the Reserve Bank of India (RBI) governor Shaktikanta Das stating that the central bank anticipates UPI transactions will reach the 1 Bn milestone in the coming months, up from the current 500 million transactions per day.

Meanwhile, in October, UPI transactions increased by 10% month-on-month (MoM), reaching 16.58 Bn, up from 15.04 Bn in the previous month. This was one of the highest spikes in the last few months.

This drop follows a significant 10% MoM increase in October, marking one of the sharpest spikes in recent months.

Meanwhile, the decline rate for UPI transactions due to technical issues has significantly improved, dropping to 0.8% from approximately 10% in 2016 when the digital payments infrastructure was first introduced. 

Speaking at the 11th SBI Banking & Economics Conclave 2024 on November 19, Dilip Asbe, managing director and CEO of the NPCI, said, “The technical decline rates have reduced to 0.7-0.8% from as high as 8-10% in 2016.”

Further, India’s payments ecosystem is considering migrating low-ticket transactions to UPI Lite, Asbe said at the time.

This comes months after the Reserve Bank of India increased the cap on transactions processed on UPI 123Pay to INR 10,000 from INR 5,000 earlier. Similarly, the per transaction limit for UPI Lite has also been raised to INR 1,000 from INR 500 earlier.

Introduced in 2022, UPI123Pay is designed for feature phone users. It allows them to access UPI services without an internet connection in 12 languages.