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UPI Drives Surge in Digital Payments Across India

Why in the news?

UPI’s dominance in India’s digital payment ecosystem has grown substantially, contributing to a ten-fold increase in payment volumes and values since 2018. It now accounts for 83% of digital payment transactions, transforming India’s financial landscape.

Growth in Digital Payments (2013–2024):

• Digital payments in India increased over 3.5 times in value from ₹772 lakh crore (2013) to ₹2,758 lakh crore (2024).
• The volume grew from 222 crore to over 20,787 crore during the same period.
• In the last five years, digital payments surged 16 times in value and 6.7 times in volume.

Role of UPI in Digital Payments:

• Unified Payments Interface (UPI) became the dominant force in digital payments, consolidating various bank accounts into one mobile interface.
• UPI’s share of digital transaction volume grew from 34% in 2019 to 83% in 2024.
• UPI transactions increased by 46 times from 375 crore (2018) to 17,221 crore (2024), while other payment methods doubled.

UPI’s Impact on Payment Systems:

• From 2019 to 2024, UPI transaction values rose from ₹18.37 lakh crore to ₹246.83 lakh crore.
• P2P (Person-to-Person) transactions grew, but P2M (Person-to-Merchant) transactions increased at a faster rate.
• UPI accounted for over 80% of transaction volumes but contributed just 30% in value in 2024.
• Other payment methods like NEFT, IMPS, and credit/debit cards played secondary roles but maintained significant shares in total transaction value.

About Unified Payments Interface (UPI):

• Launched in 2016 and operated by NPCI.
• Enables integration of multiple bank accounts into a single mobile app.
• Built on Immediate Payment Service (IMPS) for instant fund transfers.
• Developed by NPCI, an initiative by RBI and IBA.
• Aims to create a robust payment infrastructure in India.
• Facilitates peer-to-peer and peer-to-merchant transactions seamlessly.
• Supports real-time transfer of funds, ensuring 24/7 availability.