The number of transactions over the Unified Payments Interface (UPI) in August hit a record 918.35 million, with a total worth of ₹1.54 trillion, according to data from the National Payments Corp of India (NPCI), with a jump of 194.3% in the number of transactions and 5.5% in value on a year-on-year basis. The NCPI data also showed that the number of transactions in August grew by 12% from July while their value grew 5.5%.
UPI allows users to transfer money any time, on a real-time basis, across multiple bank accounts without revealing details of one’s bank account to the other party. At present, 141 banks are live on UPI, compared with 21 banks when the payments system was launched three years ago. The payments system was developed by NPCI, an umbrella body for all retail payments in India. The simple, safe, cost-effective, mobile-based payments system has become one of the most prominent forms of digital payments.
“There has been an uptick in P2P (person-to-person) transactions as well as in the P2M (person-to-merchant) category, which now accounts for 30% of the payment transactions. There has also been active engagement in the ecosystem to acquire more merchants, which has led to more transaction volumes," said Praveena Rai, chief operating officer of NPCI.
UPI-based transactions, in a first, also overtook debit card payments, in 2018-19 with 5.4 billion transactions on the payments system compared with 4.4 billion payments by debit card, according to the annual report of the Reserve Bank of India released last week. In comparison, in 2017-18, UPI transactions totalled 915.2 million while there were 3.34 billion debit card transactions.
This indicates more payment options and a shift in the preferences of consumers with regard to digital payments. Besides UPI, the other popular e-payment options include debit cards, National Electronic Fund Transfer (NEFT), prepaid payment instruments such as wallets, and internet banking.
The surge in UPI transactions comes in the wake of the banking regulator’s report on payments and settlement system vision 2021 in May.