What made UPI the largest online payments platform in the world?

By Puja Sharma

In FY22, 60% of volumes of India’s retail payments came from UPI which will further lead to greater digital adoption for payments and financial services. The last month has been an interesting phase for the merchant and financial space, the transactions nearly doubled.

The Unified Payments Interface (UPI) in India crossed 5 billion transactions for the first time in March, making it the largest digital payments platform in the world. The National Payments Corporation of India (NPCI) reported that up to March-end, UPI processed 5.04 billion transactions worth Rs 8.88t. Transaction volumes were 11.5%  higher and transaction values were 7.5% higher than in February.

A total of 2.73 billion transactions were processed by UPI in March 2021, amounting to Rs 5.04t. Since FY22 began, the platform has processed 45 billion transactions, totalling Rs 83 trillion, thus surpassing $1t in transactions. There were 42.03t rupees worth of transactions processed in FY21. As a result, both volume and value of transactions doubled within a year, illustrating the explosive growth of digital payments in the country, especially UPI.

Dilip Modi, Founder of Spice Money, commenting on this significant achievement said: “UPI has crossed a significant milestone by breaching the $1t mark in transactional values in  FY22. We are delighted to see the exponential rise of the adoption of UPI, especially in the last two years driven by the pandemic. Both the volume and value of UPI transactions have doubled in a year.

This indicates the country’s receptiveness to digital financial interventions and sets a firm foundation for further similar initiatives. Additionally, given the ability of digital to connect the farthest corners of the country, there is immense potential for it to empower rural India and bridge the urban-rural divide.

India is building a world-leading digital financial infrastructure with inclusion built into the core. Initiatives such as UPI Lite which aims to encourage small-ticket offline digital payments, and UPI123Pay allowing transactions to be done through feature phones without an internet connection will further the reach of the digital payments ecosystem.

“We’re looking forward to being a part of NPCI’s journey towards processing a billion transactions a day in the coming year, especially keen on front-ending this journey in rural India,” Modi added.

In FY22, 60% of volumes of India’s retail payments came from UPI which will further lead to greater digital adoption for payments and financial services. The last month has been an interesting phase for the merchant and financial space, the transactions nearly doubled. Crossing the 5 billion transaction mark before the conclusion of the fiscal year has been a watershed moment in UPI payments history.

FinTech banking tech major Kiya.ai manages 20% of overall UPI transactions in the country, Manoj Chopra, Head of Innovation and Product Development at Kiya.ai, said: “Acceptance at a huge number of merchant locations with easy, rapid, and frictionless payments, including the use of QR codes, is another critical aspect of UPI’s massive size.”

Customers’ ‘TRUST’ behaviour, on the other side, is the result of the availability of extremely secure UPI architecture. To a considerable extent, the pandemic also aided in boosting digital payments usage, including UPI transactions, and, most critically, the government’s massive push for digital transactions, including demonetization.

Chopra further added, “The growth is bound to accelerate further through NPCI’s new innovative features like AutoPay and Prepaid vouchers. UPI123Pay and UPI Lite will drive the adoption of UPI in the rural sector. Also, with UPI now gaining acceptance globally in geographies like Singapore, Bhutan, UAE, and Nepal, we expect transactions to cross the 1 billion monthly transaction milestone by 2025″.