After hitting a record high in March, payment transactions via Unified Payments Interface (UPI) declined second time in a row in May. Last month, as many as 733.54 million transactions were clocked across its various platforms, down 6% from April, according to data from National Payments Corp. of India.

Despite a slowdown in volume, value of such transactions continued to expand. Data showed that transactions worth 1.53 lakh crore were made, up 7.3% from April.

During March, transactions hit a record high of 799.54 million worth 1.33 lakh crore, up from 93,000 transactions when it was launched close to three years ago. UPI’s growth has more or less been consistent since then, both in terms of value and volume.

“In case of smaller banks across the country and regional rural banks, the UPI adoption is still happening in a big way and hence we have been witnessing growth in both volumes and value," Mandar Agashe, Founder and Vice Chairman of payments solution provider Sarvatra Technologies said. “The existing user base of customers is now opting for higher value and more frequent transactions, instead of smaller value transactions."

Currently, 143 banks are live on UPI, down from 144 in April.

UPI allows users to transfer money across multiple bank accounts on a real-time basis, without putting out details of the beneficiary’s bank account. Funds can be immediately transferred through one’s mobile phone 24x7 and 365 days, regardless of the bank’s working hours. The payments system was developed by the NPCI, which is an umbrella organisation for all retail payments in the country.

While the pilot was launched in April, 2016, banks started uploading their UPI-enabled apps four months later. UPI gained momentum after Prime Minister Narendra Modi launched the UPI-based, Bharat Interface for Money (BHIM) app, in December 2016, soon after he announced the massive exercise to scrap 500 and 1,000 notes in November 2016.

The growing popularity of UPI can be attributed to its simple, safe, cost-effective and mobile-based payment system. Transactions via UPI have surpassed mobile wallet payments in terms of volume of transactions as well as value.

According to the Reserve Bank of India (RBI), payment systems such as UPI and Immediate Payment Service (IMPS) are likely to register average annualised growth of over 100% by 2021.

With an aim of a less-cash society, the banking regulator in May announced the vision for payments in India during the three-year time period of 2019-2021, which will enable safe, secure, accessible and affordable payment system. The idea is also to provide more payment options to the population that has been untouched by payment systems. It expects digital transactions to quadruple to 8,707 crore in December 2021 from 2,069 crore in December 2018.

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