A billion transactions a day can be processed through UPI: RBI governor

The Unified Payments Interface (UPI), India’s flagship digital payments platform, has the bandwidth to process one billion transactions a day, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday while launching the mission “Har Payment Digital”.

The objective of the mission, as part of Digital Payments Awareness Week (DPAW) 2023, is to make every citizen in the country opt for digital payments.

Das said he expected more countries to join India in linking their payments on a real-time basis, like the one with Singapore’s PayNow, which started last month.

“Currently the number of transactions done through UPI is 26 crore (260 million) per day. The system has the capacity to handle 100 crore (one billion) transactions per day. So the system is geared to onboard new customers into the UPI platform,” Das said.

On March 1, there were 300 million transactions through the UPI.

“NPCI (National Payments Corporation of India) is operating the UPI in three parallel systems — they not only act as disaster recovery facilities for each other but are running parallel. In the unlikely event of some problems in one system, the other systems are very much in operation,” Das said, alluding to the capacity of the UPI in terms of handling transactions.

NPCI’s management has said it is possible for the payments platform to process over a billion transactions a day in the next three-five years if the “three zero” approach is followed, i.e. zero touch (contactless), zero time (it has to be faster than cash), and zero cost to the customer.

NPCI, the umbrella organisation for digital payments in the country, operates the UPI.

The UPI processed over 8 billion transactions in January 2023, the highest since its launch in 2016.

“… The UPI has emerged as the most popular and preferred payment mode in India, pioneering Person to Person (P2P) as well as Person to Merchant (P2M) transactions in India, accounting for 75 per cent of digital payments. The volume of UPI transactions has increased multifold from 0.45 crore (4.5 million) in January 2017 to 804 crore (8.04 billion) in January 2023. The value of UPI transactions has increased from just Rs 1,700 crore to Rs 12.98 trillion during the same period,” he said.

The RBI has taken steps to internationalise the UPI via cross-border linkages such as UPI-PayNow. This linkage is in addition to the QR code-based and UPI-enabled P2M payments already happening in Bhutan, Singapore, and the UAE. Recently, they have also enabled visitors from G20 countries to get on to the UPI without having a bank account in India.

“We are working to link our payment system, that is, UPI, with other countries’ payment systems. We began the journey with the linkage with Singapore. In the coming months and years, I am sure and I am looking forward to other countries too,” the governor said.

Digital payment growth in recent years has been exponential. According to the RBI data, 360 million transactions are processed per day now as compared to 240 million a day in February 2022 — a growth rate of 50 per cent.

While digital payments have skyrocketed in the past few years, there is still a significant portion of the population that still not use this mode of transaction.

According to a survey by the RBI of 90,000 respondents, 42 per cent had used digital payments, 35 per cent didn’t, though they were aware of the matter, while 23 per cent did not know such a thing was there.

Considering this, the RBI is creating awareness to increase the use of digital payments. Hence, it has been observing a targeted campaign -- DPAW -- every year.

From this week onwards, the RBI, in collaboration with banks and other stakeholders of the payment systems, will carry out a multimodal campaign covering print, television, radio, and social media during the week on the theme “Adopt digital payments and Teach others also”.

“The mission ‘Har Payment Digital’ is aimed at reinforcing the ease and convenience of digital payments and facilitating the onboarding of new consumers into the digital fold,” the governor said.