Tuesday, 14 Jan, 2025
The growing volume and value of transactions highlight UPI's critical role in promoting the nation's transition to a cashless economy. Source: Freepik
In October 2024, UPI handled 16.58 billion financial transactions totaling ₹23.49 lakh crores, an increase of 45 percent from the 11.40 billion transactions in October 2023.
By handling 16.58 billion financial transactions in a single month in October 2024, the Unified Payments Interface (UPI) set a new record and demonstrated its critical role in India's digital revolution. By combining several bank accounts into a single smartphone application, UPI, which was introduced by the National Payments Corporation of India (NPCI) in 2016, has completely transformed the country's payment environment. Through periodic payment requests, this system gives consumers freedom while facilitating smooth peer-to-peer transactions, merchant payments, and fund transfers.
In October 2024, UPI handled 16.58 billion financial transactions totaling ₹23.49 lakh crores, an increase of 45 percent from the 11.40 billion transactions in October 2023. This increase in usage, which has 632 banks linked to its platform, demonstrates UPI's growing hegemony in India's payment market. The growing volume and value of transactions highlight UPI's critical role in promoting the nation's transition to a cashless economy as more people and companies embrace the ease and security of digital transactions.
Source: National Payments Corporation of India
Small enterprises, street sellers, and migrant workers have all benefited greatly from UPI as it provides them with a quick and simple method of sending and receiving money. As individuals looked for safer, contactless alternatives to cash transactions during the COVID-19 outbreak, its popularity was especially expedited. However, UPI's success goes beyond the robustness of its infrastructure; it also results from the change in behavior it has sparked, where accessibility and system trust have been crucial in promoting broad use.
Source: National Payments Corporation of India
Voice boxes are one of the little but important improvements that made this change possible. These gadgets, which are frequently seen at tea stalls and snack carts, make sure that vendors who are frequently too busy to check their phone messages are informed of their earnings by announcing the amount of money received with each QR code transaction. Gaining the trust of small businesses that were previously used to cash transactions and cautious of digital payments has been made possible in large part by this straightforward but useful function.
The ability for customers to select their favorite payment apps, independent of the bank where their account is maintained, is another significant aspect of UPI's design. This flexibility has given consumers the power of choice, making it easier for them to embrace UPI as their go-to payment method.
Another significant development in the field of digital payments is the pairing of RuPay credit cards with UPI. By using this feature, customers can make payments using their credit lines rather than their savings accounts, combining the advantages of both credit cards and UPI for transactions. With UPI and RuPay both growing quickly internationally, India's digital payments revolution is gaining traction abroad. At the moment, UPI operates in seven nations, including important markets like France, Mauritius, Bhutan, Nepal, Singapore, the United Arab Emirates, and Sri Lanka.
The use of digital technology for conducting business activities in India, specifically the use of UPI for placing orders, has witnessed a significant increase. As per a recent survey conducted by the statistics office, the utilization of the internet for business activities, including making UPI payments or placing orders through online platforms, rose to 13.5 percent from 7.7 percent in rural areas and to 30.2 percent from 21.6 percent in urban areas during 2022-2023. According to RBI data, India’s ATM count decreased by 691 units, bringing the total to 218,815 between March 2023 and March 2024. Despite this reduction, the average monthly volume of cash withdrawals from ATMs rose by approximately 7 percent albeit from a lower base. This trend suggests that, while fewer ATMs are available, individuals are likely withdrawing larger sums per transaction, indicating a still on rise cash usage patterns.
Being UPI's first European venture, its arrival into France is very noteworthy. Due to this development, Indian businesses and consumers can now easily send and receive money while living or visiting elsewhere.
Prime Minister Modi has aggressively advocated for UPI's growth within the BRICS alliance, which now has six new members, as part of its worldwide push. It is anticipated that this program will strengthen remittance flows even more, advance financial inclusion, and elevate India's profile in the international financial arena.
As of 2023, India accounted for about 49 percent of all real-time payment transactions worldwide, according to the ACI Worldwide Report 2024, demonstrating the country's leadership in the development of digital payments. India is establishing new international standards for financial inclusion and economic empowerment as a result of UPI's expanding global reach and the ongoing growth of digital transactions.
