The Unified Payments Interface (UPI) has solidified its position as India’s go-to digital payment platform, witnessing a staggering surge in both transaction volume and value in 2023. Interestingly, the number of UPI transactions surpassed the 100 billion mark by the end of 2023, according to the latest data from the National Payments Corporation of India (NPCI). This is a huge jump from just 38.74 billion transactions recorded in 2021 and 74.04 billion in 2022.
For the entire year of 2023, a staggering 117.68 billion UPI transactions were processed in India, amounting to an impressive Rs 182.84 trillion in value. This phenomenal achievement reflects a substantial 58.9% YoY growth in transaction volume and 45.2% YoY growth in transaction value.
During the last three months of 2023, India experienced a notable surge in UPI activity, logging 34.66 billion transactions. This volume accounted for nearly 30% of all UPI transactions processed during the year. The cumulative value of these UPI payments stood at Rs 52.78 trillion, accounting for 28.87% of the total UPI transaction value recorded during the year.
The juxtaposition of UPI transaction volume and value growth provides a fascinating insight into consumer usage behaviour in India’s digital payment sector. Despite the surge in UPI transaction volume, which significantly outpaces the transaction value growth, it’s evident that a vast majority of Indians are gravitating towards using platforms like GooglePay, PhonePe, and Paytm primarily for relatively modest monetary exchanges. This pivot towards frequent microtransactions signals a deepening trust in the reliability and security of digital payment platforms.
Factors Driving UPI Volume Growth in India
NPCI data also reveals a staggering 49% surge in monthly UPI transactions from January to December 2023. The rapid growth of UPI transactions in India can be attributed to several key factors.
A significant contributor to this surge is the increasing popularity of UPI Autopay, an innovative recurring payment mechanism facilitated by NPCI through the UPI platform. Recent reports suggest that UPI Autopay is fast becoming the go-to choice for users seeking efficient solutions for bill payments, subscription renewals, insurance premium settlements, and credit card bill clearances nationwide.
Furthermore, the recent increase in UPI transaction limits, from Rs 15,000 to Rs 1 lakh, has played a pivotal role in propelling the growth of the UPI Autopay feature in both transaction volumes and values.
Other Key Highlights
- In December 2023, the number of UPI transactions increased 53.5% YoY to 12.02 billion in volume. The value of these transactions reached Rs 18.23 trillion, marking a 42.2% annual growth.
- Immediate Payment Service (IMPS) transactions in India grew 2.66% YoY in December 2023 to 498.79 million in volume. In value terms, the figure grew 17.2% YoY to Rs 5.7 trillion.
As India crosses the 100 billion UPI transaction threshold in 2023, one thing is clear: the nation stands on the cusp of a financial revolution. India will soon witness a surge in fintech innovation, attracting global players and unlocking previously untapped economic potential. Beyond the urban centres, the UPI adoption growth promises to empower citizens in rural areas, providing them with enhanced financial access and control over their lives. The journey toward a cashless India is not just a numerical achievement but a catalyst for transformative change and inclusive financial empowerment.
