At 3.5 billion transactions in August, UPI clocks 120% surge in volume

The National Payments Corporation of India’s (NPCI's) flagship payment platform Unified Payments Interface (UPI) has logged more than 3 billion transactions for the second consecutive month in a row in August, signalling wider digital payment adoption. 
 
In August, UPI logged 3.55 billion transactions, which is an all-time high in terms of the volume of transactions the payment platform has recorded since its launch. In value terms, UPI saw transactions worth Rs 6.39 trillion in August, which is again a record high. On a month-on-basis (MoM), UPI’s volume of transactions was up 9.5 per cent in August, and the value of transactions up 5.4 per cent. 

In July, UPI processed 3.24 billion transactions, up 15.7 per cent from June, when it processed 2.8 billion transactions. In value terms, the platform processed transactions worth Rs 6.06 trillion in July, up 10.76 per cent from June. 

Launched in 2016, UPI has seen tremendous adoption, further accelerated by the Covid-19 outbreak. It crossed 1 billion transactions for the first time in October 2019. The next 1 billion transactions came in under a year. In October 2020, UPI processed more than 2 billion transactions for the first time. Further, the journey from 2 billion transactions a month to 3 billion was traversed in 10 months, indicating the incredible popularity of UPI as a platform for retail digital payments among consumers. 

The payment platform saw a minor dip in April and May in step with the dip in economic activity due to the second wave of the pandemic, but recovered as the economy unlocked. 

UPI made up for 10 per cent of the overall retail payments in 2020-21 (excluding real-time gross settlement), growing at a compound annual growth rate of 400 per cent between 2016-17 and 2020-21. Until a few years ago, UPI’s share in the overall retail payments was only 2 per cent. UPI’s incredible growth can be attributed to interoperability, open-source platform, ease of use, and zero merchant discount rates. 

While a majority of transactions on the UPI platform - almost 81 per cent by value - are peer-to-peer, suggesting UPI is replacing cash in the payment ecosystem and consequently leading to more digitisation of the economy, around 19 per cent of the transactions are peer-to-merchant, accounting for nearly Rs 9.96 trillion, surpassing both credit and debit card point-of-sale transaction values.

On the UPI platform, third-party application providers, such as Walmart-backed PhonePe and technology giant Google-backed Google Pay, dominate the space.

Immediate Payments Service (IMPS), another payment platform operated by NPCI, the umbrella organisation for retail payments in India, logged 377.94 million transactions in August, up 8.05 per cent from July. In value terms, IMPS saw transactions worth Rs 3.18 trillion, up 3.03 per cent from July. 

FASTag, developed by NPCI’s National Electronic Toll Collection programme, has also seen a record number of transactions in August with 201.2 million transactions, up 4.61 per cent from July, worth Rs 3,076.56 crore - up 3.36 per cent from the previous month. 
 
Similarly, Bharat Bill Payment System, a one-stop ecosystem for all recurring bill payments, recorded 58.88 million transactions worth Rs 10,307.4 crore. On a MoM basis, the volume of transactions was up 15 per cent and the value of transactions up 7.22 per cent.