The total number of UPI transactions in India has crossed the 1 billion mark for the first time in October 2019. It also makes the Unified Payment System, (UP) the fastest growing mobile payment system in the world.
UPI, which was first introduced in three years back to make the mobile transaction system more hassle-free, is being used by 100 million smartphone users in India. It allows any of UPI payment system users to transfer any amount to other users instantly. Despite having a lot more options to transfer money from mobile, smartphone users are finding UPI much more convenient and the unprecedented rise in the number of UPI transactions, as well as total value of those transactions, is the testimony to the popularity of UPI among its users across India.
Currently, there are 141 banks in India that are associated with UPI.
UPI Transactions in India: Trio Leads The Adoption
The exploded adoption of UPI is largely driven by the open architecture of the payment system, which allows users to access any of their bank accounts through it. People found instant account-to-account money transfer facility through UPI much more convenient in real life.
The three leading mobile payment systems in India – Paytm, PhonePe and GooglePay – were quick to realise the great potential of UPI, especially while adding small and medium retailers across the country. Unlike mobile wallets that settles the payment with retailers wither weekly or twice a week, the instant money transfer facility through UPI got individual and small retailers hooked with it. Soon, all the mobile wallet companies started offering UPI facility as well on their platforms. Today, UPI transactions account for a sizeable share of their total transaction volume.
The evolution of 4G network has played a vital role in the exploded adoption of mobile payments, including UPI. As smartphone users have also become more comfortable with QR Codes, there has been an exponential rise in the number of UPI transactions since the beginning of 2019.
In spite of having the backing from the government, BHIM UPI app has failed to take off as expected. Only 1.7% of the total number of UPI transactions are recorded through BHIM app. On the other hand, the three dominant payment processing players – Paytm, PhonePe and GooglePay – account for 88% of total UPI transactions volume.
Dilip Abse, Chief Executive Officer, is expecting that the number of UPI users will grow to 500 million in the next three years. He also informed that efforts are being made to push the adoption of UPI digital payment among retailers as well. He expects that there will be 30 million QR codes in the next two years, up from 10 million now.
Excited from the success of UPI in India, NPCI is planning to launch the system in other countries. However, it requires a set of permissions and proper planning to do it seamlessly.