In July 2024, UPI transactions reached an all-time high of ₹20.64 lakh crore ($247 billion) in a single month. The platform has processed over ₹20 lakh crore for three consecutive months.
Also Read: Yelp Filed an Antitrust Lawsuit Against Google
UPI has surpassed other payment platforms such as Alipay, PayPal and PIX. Alipay, which was once the global leader processed 36.5 billion transactions in 2023, while Brazil’s PIX processed 42 billion transactions.
UPI was launched in 2016 by the National Payments Corporation of India (NPCI) and is regulated by the Reserve Bank of India (RBI). Initially designed as a simple real-time payments system.
The addition of services such as credit cards, prepaid wallets and vouchers to UPI has broadened its utility. The platform’s interoperability has also improved allowing transactions across multiple channels and contributing to its growing popularity.
UPI’s user base has expanded from 300 million to over 400 million in recent years. This increase is attributed to the platform’s functionality and its ability to facilitate transactions beyond traditional bank accounts.
Industry experts predict that UPI’s growth in transaction value and volume will double within the next 2-3 years. The introduction of RuPay credit cards and a credit line on UPI are expected to drive this expansion further.
With nearly 300 million smartphone users in India not yet using UPI, there is potential for future growth. The integration of new products and services will likely attract more users to the platform.
RBI Governor Shaktikanta Das has addressed the UPI’s potential for global expansion. India is actively working on making UPI and RuPay cards internationally accepted with several countries already on board.
APMs refer to payment methods that do not rely on traditional bank-issued debit or credit cards or cash. These include real-time payments like UPI, digital wallets, mobile payments, online banking, voucher-based payments and buy-now-pay-later options.
APMs have gained traction worldwide due to their convenience and low transaction costs. Many countries have developed their own real-time payment systems.
According to Paysecure, UPI leads the global APM market in transaction volume. Following UPI, Skrill, a digital wallet used in over 100 countries processed 49 billion transactions in 2023, while Brazil’s PIX and China’s Alipay processed 42 billion and 36.5 billion transactions.
Also Read: Johann Rupert Surpasses Aliko Dangote as Africa’s Richest Person
UPI’s efficiency is highlighted by its ability to process 3,729.1 transactions per second in 2023, a 58% increase from 2022’s 2,348 transactions per second.
The National Payments Corporation of India CEO, Dilip Asbe has expressed confidence that UPI has the potential to reach 100 billion transactions per year within the next decade.
A PwC India report anticipates a threefold increase in UPI transactions from 131 billion in 2023-24 to 439 billion by 2028-29. This would mean that UPI could account for 91% of all retail digital transactions in India.
UPI has been adopted in various countries including the UAE and Malaysia, as a payment method.
RBI Governor Shaktikanta Das has addressed the bank’s focus on deploying UPI-like infrastructure abroad. This includes enabling QR code-based UPI payments at international merchants and linking UPI with other countries’ fast payment systems.
In August 2024, at the Global Fintech Fest RBI Deputy Governor T Rabi Sankar unveiled the UPI Interoperable Cash Deposit (UPI-ICD) feature. This innovation allows customers to deposit cash at ATMs using UPI apps, eliminating the need for physical debit cards.
Customers can now deposit cash into their own or other bank accounts using ATMs equipped with cash recycler machines. These machines are capable of both cash deposits and withdrawals.
Step-by-Step Process:
- Find a Cash Deposit Machine (CDM) that supports UPI transactions.
- Select the UPI Cash Deposit option on the ATM screen.
- Use your UPI app to scan the QR code displayed on the CDM.
- Input the number of bills for each denomination (e.g., ₹100, ₹500) and confirm the transaction.
- The UPI app will show the deposit amount. Verify that it matches the cash amount deposited.
- Select the bank account to deposit the cash into from your UPI-linked accounts and authorize the transaction with your UPI PIN.
By removing the need for a physical debit card, UPI-ICD reduces the risk of card-related frauds. This cardless approach also integrates with the existing UPI Cardless Cash Withdraw system.
Also Read: Colin Huang: Former China’s Richest Person Loses $14 Billion in One Day
