Record UPI transactions are making India more financially inclusive

By Puja Sharma

A record high of 782 crore Unified Payments Interface (UPI) transactions was recorded in December 2022, amounting to Rs 12.82 lakh crore. Volume and value of UPI transactions increased by 7.12% and 7.73%, respectively, compared to November.

UPI transactions have generally been increasing over the previous two years, barring a couple of minor hiccups resulting from pandemic-related restrictions. According to the National Payments Corporation of India (NPCI), the volume of transactions increased by 71% year on year in December, while the value of transactions rose by 55%.

Since the Government of India’s strategy to digitise the financial sector and economy was implemented, payment transactions have been consistently increasing. Realising “Faceless, Paperless, Cashless” status is one of the main goals of Digital India. Digital payments have been given top priority by the Indian government as it attempts to formally integrate them into all sectors. The goal is to make seamless digital payment available to all Indian people in a safe, rapid, easy, and inexpensive way.

According to NPCI data, approximately 74 billion transactions of Rs 125.94 trillion were processed using UPI in the calendar year 2022. The platform handled more than 38 billion transactions totaling Rs 71.54 trillion in 2021. As a result, nearly 90% more transactions took place on the platform in a year, and their average value increased by 76%.

UPI has also been a savior during the Covid-19 pandemic, with its adoption expanding rapidly due to its ability to allow easy, contactless transactions. People appear to have become more aware of contactless payments in daily life as a result of the Covid pandemic. While many people began using contactless payment methods like UPI before the pandemic, its use has substantially increased since the lockdown.

The Ministry of Finance has made it clear that no levy will be imposed on financial transactions made through the system, although there have been arguments made about adding fees. Aiming to recover the cost of building and running the UPI infrastructure, the banks examined the possibility of recovering the costs. However, the government has affirmed that cost recovery must be handled through other means. UPI is a digital public good with immense convenience for the public and productivity gains for the economy.

On the note of the National Payments Corporation of India (NPCI), payments transactions via the Unified Payments Interface network surging, Dilip Modi, Founder, of Spice Money said, “According to NPCI data, it has once again crossed a crucial milestone, ending the year with 782 crore transactions with a value of Rs 12.8 lakh crore in December 2022. We are delighted to see UPI usage increasing exponentially as a result of the government’s ongoing efforts to promote digital transactions over the last few years. In 2022, UPI transactions have increased dramatically in both volume and value over the last year, demonstrating the success of UPI in India.”

The main advantage of UPI is the convenience it brings with it. UPI allows money to be transferred between multiple accounts without needing separate profiles for each transaction, making it easy for the user to transact. Another reason is that UPI’s success is a simple, fast, and secure way of transaction. UPI has been a major tool in driving financial inclusion. It has grown not only in the urban parts but also in the rural parts of India, helping the masses to easily transact and avail of services. In 2023, we expect UPI to achieve even greater heights and help Bharat transact swiftly and securely.”