UPI processed nearly 6 billion transactions worth Rs 10 trillion in May

NPCI sets its eyes on processing a billion UPI transactions a day on its platform within the next 3-5 years

In yet another record-breaking month, India’s flagship digital payment platform, Unified Payments Interface (UPI), has processed transactions worth over Rs 10 trillion in May, a record high since the time it was launched in 2016. Even the number of transactions processed on the platform in May at 5.95 billion is a record high for the payments platform.

On a month-on-month basis, the volume of transactions was up 6.63 per cent and the value of transactions was up 5.91 per cent, despite a high base. In April, UPI had processed 5.58 billion transactions amounting to Rs 9.83 trillion. When compared on a year-on-year basis, UPI transactions in volume and value terms have more than doubled, indicating the meteoric rise the digital payments platform has seen over the years.

In FY22, UPI processed more than 46 billion transactions amounting to over Rs 84.17 trillion, thus breaching the $1 trillion mark. And, in FY21, it had processed 22.28 billion transactions, amounting to Rs 41.03 trillion. So, both the volume and value of transactions doubled in a year’s time. Experts have pointed out that the Covid-19 pandemic fueled the acceleration of adoption of digital payments in the country in the last two years. Apart from a few hiccups during the first two waves of the pandemic, UPI transactions have been on an upward trajectory, mirroring the recovery in the broader economy.

Now, the payments platform has set its eyes on processing a billion transactions a day on its platform. While this milestone can be achieved in 10 years’ time without any effort whatsoever, given the organic rise the payments platform is witnessing in the volume of transactions being processed, the National Payments Corporation of India (NPCI), the umbrella organisation of digital payments in the country, is aiming to achieve this milestone in the next 3 – 5 years.

NPCI would follow the three “zero” approaches – zero touch (contactless), zero time (it must be faster than cash), and zero cost to the customer – to reach the milestone of a billion transactions a day in the next 3 – 5 years.

The recent initiatives of the Reserve Bank of India (RBI) would also go a long way in achieving this milestone. The RBI in association with NPCI launched the UPI123Pay for 400 million feature phones which will allow all transactions to be done through feature phones without an internet connection. Once this picks up, UPI transactions will see a meteoric rise going forward. Similarly, the on-device” wallet feature for UPI users, which will be known as “UPI Lite”, for facilitating small ticket transactions, may also prove to be a game changer for the payments platform.

In addition to this, NPCI is also placing its bets on UPI AutoPay, which allows customers to facilitate recurring e-mandate using any UPI application for recurring payments such as mobile bills, electricity bills, EMI payments, entertainment/OTT subscriptions, insurance, mutual funds among others, to drive the next phase of growth of UPI.