The Number of UPI Transactions Plunged Significantly For The First Time Ever!

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Since its inception in India, the Unified Payments Interface, aka UPI, has seen an unimaginable amount of scale and speed in terms of growth and adoption. As many as 148 Indian banks currently live on the UPI platform right now. The platform also crossed a huge milestone of covering 1 billion transactions in October 2019 within just three years after its launch. Nowhere in the world neither there is any such facility available nor such a number of transactions have ever happened on one single platform.

Now after a glorious run for almost 10 months now, it has been found out that the Indian government’s UPI has suffered a 6% M-o-M decline in the number of transactions that were recorded in March 2020.

In an update via Twitter, The National Payments Corporation of India (NPCI) reported that the number of UPI transactions in India declined to 1.25 billion in March 2020, from 1.33 billion recorded in February 2020.


The value of the UPI transactions took a plunge as well by dipping down to Rs 2.06 Lakh Cr in March 2020 which stands in stark contrast to that of transactions valued at Rs 2.22 Lakh Cr recorded in February 2020.

Hindered Growth Rate Of UPI Amid The Outbreak

The culprit behind the UPI’s declined growth is obviously the Covid-19 outbreak in India which gained significant momentum in the month of March. The travel restrictions that were put in place by the Indian Government in the first half of the month along with the announcement of the 21-day countrywide lockdown were two of the major reasons which heavily impacted the growth rate of UPI as these reduced a big portion of daily transactions on the platform.

Impact of Covid-19 On Other Digital Payment Methods

The Covid-19 induced lockdown has not only had a major impact on the UPI transactions but on all other significant online payment methods as well. This is primarily because except for essentials, the demand for external goods went down at blazing fast speeds.

Listed below is the performance of other digital payment methods for the month of March, 2020.

  • AePS or the Aadhaar-enabled Point of Sale now stands at 181.81 million transactions worth Rs 10,170.31 Cr.
  • 84.55 million transactions worth Rs 1421.01 Cr was recorded by the NETC or National Electronic Toll Collection.
  • Lastly, 216.82 Mn transactions worth Rs 2.01 Lakh Cr was clocked by Immediate Payment Service (IMPS)

Way Forward For UPI

Besides the obvious intervention of the Covid-19, a new rule coming into effect from April 2020 could have a significant impact on the number of UPI transactions volume and value both. it is being reported that the banks are gearing up to end the free service when it comes to UPI transactions related to P2P or Person to Person.


A charge of Rs 2.5 for transactions under or equal to Rs 1000 and Rs 5 for transactions above Rs 1000 will be levied by the UPI platforms after a user avails 20 free transactions in a month. It should also be noted that an additional 18% of goods and services tax (GST) will also be applicable to these transactions charges as well. These UPI charges related to P2P transactions have already come into play as of April 3, 2020.

The aim of the levied charges on UPI transactions is to make sure banks, by facilitating UPI transactions on their own internet banking app or via third-party platforms such as Paytm, PhonePe, Google Pay, BharatPe and Amazon Pay, could generate additional revenue cover up their infrastructure cost that goes into providing UPI processing service.

However, it would be interesting to see whether these charges for the UPI platform which for so long was absolutely free will sit well with the consumers or not.


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