UPI crosses ₹10 trillion transactions in May

MUMBAI: Home-grown payments system UPI (unified payments interface) crossed the milestone of ₹10 trillion worth of transactions in May, processing nearly 6 billion payments during the month, as per data from India’s retail payments umbrella entity National Payments Corp. of India (NPCI).

Transaction volumes stood at 5.9 billion, which in value terms totalled ₹10.4 trillion, the data showed. On a month-on-month basis, the value of transactions rose 5.9%, and more than doubled from ₹4.9 trillion processed in May last year.

Experts said the primary advantage of UPI is that it has eliminated the hassle of third-party payments.

“UPI has crossed a phenomenal milestone again, this time crossing the ₹10-trillion mark in transactional values, and 5.95 billion transactions in terms of volume, in May 2022. We are delighted to see the exponential rise of the adoption of UPI, with the pandemic acting as a catalyst in the last two years,” said Dilip Modi, founder of rural fintech company Spice Money.

Modi added initiatives such as UPI Lite which aims to encourage small-ticket offline digital payments, and UPI123Pay allowing transactions to be done through feature phones without an internet connection will further the reach of the digital payments ecosystem.

In March, the Reserve Bank of India (RBI) launched UPI for feature phones, thereby including about 400 million users of such phones under the ambit of India’s home-grown payments network. Feature phones are basic phones, which typically provide voice calling and text messaging functionalities.

Meanwhile, a report by digital payments company PhonePe and Boston Consulting Group (BCG) said on Thursday that India’s digital payments market is at an inflection point and is expected to more than triple to $10 trillion by 2026. As per the report, both global and domestic fintech players have been key drivers of UPI adoption in India among end users.

“UPI has supercharged India’s transition to non-cash payments when it comes to both person-to-person (P2P) and person-to-merchant (P2M) transactions. Not surprisingly, UPI saw about 9x transaction volume increase in past three years, increasing from 5 billion transactions in FY19 to about 46 billion transactions in FY22: accounting for more than 60% non-cash transaction volumes in FY22,” said Karthik Raghupathy, head of strategy, and investor relations at PhonePe.