UPI logs 4.52 bn transactions worth Rs 8.26 trn in Feb, lower than Jan

Unified Payments Interface (UPI), the flagship digital payments platform of India, logged 4.52 billion transactions, amounting to Rs 8.26 trillion in February, according to data released by the National Payments Corporation of India (NPCI), the umbrella organization for retail payments in the country. This was marginally lower than the record 4.61 billion transactions the payments platform had reported, amounting to Rs 8.32 trillion, in January.

The marginally low transactions, both in volume and value terms is because of fewer days in the month of February. Having said that, on a year – on – year (YoY) basis, UPI transactions were up 97 per cent in volume terms in February and 94 per cent in value terms.  

After reporting a dip in transactions in May last year due to the second wave of the coronavirus (Covid-19) pandemic, UPI transactions have witnessed spectacular growth since, in sync with the economic recovery and increased adoption of digital payments in the country.

In FY22 so far, UPI has processed a little over 40.49 billion transactions worth Rs 74.51 trillion. This is almost double the number of transactions (in volume terms) reported in FY21, reflecting the increased adoption of digital payments in the country, especially UPI. Further, with one month remaining in the financial year, UPI has achieved the goal of over 40 billion transactions in FY22 set by NPCI’s CEO. In CY21, UPI had processed more than 38 billion transactions, amounting to Rs 71.59 trillion.

NPCI has set itself a target of 1 billion transactions a day on the UPI platform in the next 3 – 5 years. “To achieve this milestone in the next 3-5 years, it is imperative that we follow the three “zero” approaches – zero touch (contactless), zero time (it has to be faster than cash), and zero cost to the customer. If these three “zero” come along then 1 billion transactions a day will happen in the next 3 – 5 years’ time, Dilip Asbe, NPCI CEO had said.

Launched in 2016, UPI crossed 1 billion transactions in October 2019. The next 1 billion came in under a year. In October 2020, UPI processed more than 2 billion transactions. The journey from 2 billion transactions a month to 3 billion was traversed in 10 months, but it took only three months for the payment platform to reach 4 billion transactions per month, from 3 billion.

According to experts, the next boost to the already burgeoning UPI transactions will come the AutoPay feature, which has seen massive adoption since recurring payments through cards saw disruption due to the Reserve Bank of India’s new guidelines on e-mandates. The AutoPay feature of UPI allows recurring payments of upto Rs 5,000.

Another popular payment platform, Immediate Payment Service (IMPS) — an instant payment interbank electronic funds transfer system — processed 420.93 million transactions in February, amounting to Rs 3.84 trillion, down 4.37 per cent in volume terms and 0.77 per cent in value terms. Further, toll collection through FASTag saw record high transactions of 243.64 million transactions worth Rs 3,631.22 crore, up 5.46 per cent in volume terms and 0.76 per cent in value terms.

The rapid adoption of digital payments in the country is reflected in the Reserve Bank of India’s digital payments index (DPI), which was launched in January to indicate the extent of digitisation of payments across the country. The DPI for September 2021 stood at 304.06 as against 270.59 in March 2021. In March 2019 the index stood at 153.47 and by September 2019, it rose to 173.49, followed by 207.94 in March 2020, 217.74 in September 2020, and 270.59 in March 2021. RBI has said the index will be published on a semi-annual basis with a lag of 4 months. The RBI-DPI has been constructed with March 2018 as the base period, i.e., DPI score for March 2018 is set at 100.