September 1, 2023
The value of transactions for UPI reached INR 15.18 trillion
Unified Payments Interface (UPI) transactions have exceeded a 50% year-on-year increase
Merchant transactions accounted for a significant share of the total transaction volume
UPI's peer-to-merchant (P2M) transactions are growing at over 100% year-on-year and have a larger share than peer-to-peer (P2P) transactions
Transactions through the Unified Payments Interface (UPI) crossed 10 billion in volume and reached a value of INR 15.18 trillion in August 2023, according to data from The National Payments Corporation of India (NPCI).
UPI transactions have exceeded a 50% year-on-year increase. To put this into perspective, there were 6.58 billion monthly transactions in August 2022. The UPI network was on the cusp of the 10 billion mark in July when it recorded 9.96 billion transactions, following a slight sequential drop in June.
The UPI system first reached 1 billion monthly transactions in October 2019, achieving fourfold growth in adoption in less than four years.
Industry experts believe there is still significant potential for growth within the UPI framework. NCPI data indicates that UPI’s peer-to-merchant (P2M) transactions are growing at over 100% year-on-year and have a larger share than peer-to-peer (P2P) transactions. Over time, P2M transactions are expected to drive UPI transaction growth, and it would not be surprising to see monthly UPI transactions reach 20 billion within the next 18-24 months.
Government officials noted that the proliferation of digital payment systems, including Aadhaar Payment Bridge, Aadhaar-enabled Payment System (AePS), UPI, and UPI Lite, had experienced growth of more than 200% over four years since FY19. This growth was attributed to the Ministry of Electronics and Information Technology’s (Meity) incentive scheme to promote RuPay debit cards and facilitate low-value BHIM-UPI transactions. A total of INR 2,600 crore was allocated for the scheme for FY23.
July data on UPI transactions released by NPCI revealed that merchant transactions accounted for a significant share of the total transaction volume, with 5.78 billion or 58% of all UPI transactions occurring between users and merchants. However, user-to-user UPI transactions dominated total value, with nearly 75% or INR 11.48 trillion being transacted on the network in July.
Regarding the distribution of UPI transactions by apps, the domestic fintech and e-commerce platform PhonePe led the UPI market share in June, with over 47% of all UPI transactions taking place through their platform. Google Pay (35%) and Paytm (14%) held the second and third positions, respectively.