UPI transactions hit record high of ₹14.3 lakh cr in May

The value of Unified Payment Interface (UPI) transactions in May hit a record high of ₹14.3 lakh crore, clocking nearly 2% growth compared with ₹14.07 lakh crore in April.

The value of transactions processed through UPI in May jumped 37% on a year-on-year basis.

In terms of volume, the number of UPI transactions increased to 941 crore in May compared with 889 crore in April.

UPI is the single largest retail payment system in India in terms of volume of transactions and has become one of the most inclusive modes of payment in India.

According to PwC, Unified Payments Interface (UPI) transactions in the country are expected to reach 100 crore per day by 2026-27, accounting for 90% of retail digital payments.

The strong penetration and growth in Unified Payments Interface (UPI) were buoyed by rapid merchant onboarding, growing digital awareness and policy thrust on continuous enhancements in the scope and reach of payment systems, the Reserve Bank of India says in its annual report for the year 2022-23.

The central bank further expanded the scope of UPI by the introduction of various features such as UPI Lite, linking of RuPay credit cards and international transactions.

The Reserve Bank has permitted small value transactions in UPI through an on-device wallet in UPI App to facilitate safe and secure payments where users can transfer a maximum of ₹2,000 to UPI Lite with the wallet subsequently debited for transaction of up to ₹200, provided sufficient balance is available. UPI Lite provides superior user experience using near real-time small value payments without the necessity of entering UPI PIN.

Traditionally, the most popular method of UPI transactions is linking the Bank account in any UPI-enabled app for making payments. This contributes over 99.9% of total UPI transactions.

To further deepen the usage of UPI, the Reserve Bank has broadened financial products and instruments that can be linked to UPI for payment processing and permitted linking of RuPay credit cards to UPI. This arrangement is expected to provide more avenues and convenience to customers while making payments through the UPI platform.

The Reserve Bank recently allowed foreign nationals and Non-Resident Indians (NRIs) access to UPI while visiting India. The facility was initially extended to travellers from G-20 countries at select international airports for merchant payments (P2M) in India. Going forward, this facility is likely to be enabled across all entry points in the country.