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Published: June 2, 2023
Updated: June 2, 2023

UPI Sets New Milestone with 9 Billion Transactions Worth ₹14 Lakh Crore in May

India's Unified Payments Interface (UPI) achieved a remarkable milestone in May, recording 9 billion transactions, according to the National Payments Corporation of India (NPCI). The UPI, which accounted for 75% of retail digital transactions in the country during the 2022-23 period, continues to demonstrate significant growth. This article highlights the impressive performance of UPI and its projected trajectory in the Indian digital payments landscape.

UPI Hits Record 9 Billion Transactions:

The NPCI confirmed that UPI reached a record-breaking 9 billion transactions in May, emphasising the increasing popularity of this digital payments system. The UPI allows users to make seamless real-time payments using their mobile devices, revolutionising the way financial transactions are conducted in India.

PwC India Report Forecasts Rapid UPI Growth:

A report by PwC India predicts that UPI transactions will reach a staggering 1 billion per day by 2026-27, accounting for 90% of retail digital payments in the country. The report, titled "The Indian Payments Handbook - 2022-27," highlights UPI's dominance in the retail segment, where it accounted for approximately 75% of the total transaction volume during 2022-23.

Projected Growth of Indian Digital Payments Market:

The Indian digital payments market is expected to witness substantial growth, with a compound annual growth rate (CAGR) of 50% in transaction volume. The PwC report projects a significant increase from 103 billion transactions in FY 2022-23 to 411 billion transactions in FY 2026-27. This remarkable growth reflects the ongoing shift towards digital payment solutions in India.

Rise of Credit Cards and Changing Dynamics:

While UPI leads the retail digital payments landscape, the PwC report acknowledges the continued growth of credit card usage. Credit cards are widely adopted and serve as one of the most popular instruments for retail digital payments after UPI. The report suggests that credit card transactions will surpass debit card transactions by FY 2024-2025.

Additionally, the report highlights a stagnation in debit card growth, primarily due to the ease and convenience offered by UPI for cash withdrawals. As UPI provides a simpler alternative to cash withdrawal, the report suggests that debit card usage may decline in the coming years.

Lucrative Opportunities in the Credit Card Business:

Revenue generated through the credit card business accounts for a significant portion of overall card revenue. The PwC report indicates that credit cards contribute nearly 76% of the total revenue in the cards segment during the 2022-23 period. This lucrative business segment presents opportunities for banks, non-banking financial companies (NBFCs), and fintech firms.

The UPI's achievement of 9 billion transactions in May underscores its growing prominence in India's digital payments landscape. With its seamless and convenient payment capabilities, UPI has captured a significant market share. As projected by the PwC report, UPI's growth trajectory is expected to be impressive, with the potential to record 1 billion transactions per day by 2026-27. The continued evolution of digital payment solutions like UPI will further shape and revolutionize India's financial ecosystem.