Economic Survey: UPI is single largest retail payment system in the country

UPI ended calendar 2021 with record high transactions by both volume and value. According to NPCI data, it recorded 4.56 billion transactions worth Rs 8.27 trillion in December

The large-scale adoption of Unified Payment Interface (UPI) for making payments has resulted in it becoming the single largest retail payment system in the country in terms of volume of transactions, the economic survey of 2021-22 noted.

“Financial transactions have been seeing high growth over the last few years with multiple avenues for making digital payments which are growing over time. Unified Payments Interface (UPI) is currently the single largest retail payment system in the country in terms of volume of transactions, indicating its wide acceptance”, the government's annual pre-budget survey said.

UPI ended calendar year 2021 (CY21) with record high transactions, both in volume and value terms. According to the data released by the National Payments Corporation of India (NPCI), in December, UPI recorded 4.56 billion transactions, worth Rs 8.27 trillion.

In CY21, UPI had processed more than 38 billion transactions, amounting to Rs 71.59 trillion. And, in 2021-22 (FY22) so far, it has processed more than 31 billion transactions, surpassing the transactions processed in 2020-21 (FY21).

With UPI transactions setting record highs every month as digital payments adoption deepens in the country, it is quite reasonable to expect this flagship payments platform to process 1 billion transactions a day. While this milestone can be achieved in 10 years’ time without any effort whatsoever, NPCI, the umbrella organisation of digital payments in the country is aiming to achieve the 1 billion transactions per day milestone on UPI in the next 3 – 5 years, its CEO Dilip Asbe, had earlier said.

As per detailed transaction data of NPCI, 50 per cent of transactions through UPI were below Rs 200, the survey said.

According to a report by Jeffries, in FY22, UPI accounts for 50 per cent of retail digital payments in the country and is almost 4.5x of debit and credit card transactions. The report said digital payments are annualising at $2 trillion in India, with UPI being the largest driver, followed by cards and mobile wallets.

Meanwhile, in April-November 2021, UPI had processed more than 24.26 million one-time mandates. creating transactions valued at Rs 44,381 crore. The transaction limit for such transactions which was increased by RBI from Rs 1 lakh to Rs 2 lakh in March 2020 was further increased to Rs 5 lakh in December 2021.