Transactions on the UPI (Unified Payments Interface) network surged over 8 per cent in October on the back of festival season-led spending, crossing the milestone of 1,100 crore transactions during the month.
The number of transactions stood at 1,141 crore, higher than 1,056 crore in September and the earlier record of 1,058 transactions in August. The transactions were 8.05 per cent higher on month and 56 per cent on year, according to data by the National Payments Corporation of India (NPCI).
Record transactions
“There has been a notable increase in transactions during October, particularly due to the festive season. This surge is attributed to heightened consumer engagement, especially in the e-commerce sector,” said Mandar Agashe, Founder and MD, Sarvatra Technologies, adding that volumes have also been supported due to the possibility of micro-transactions.
In terms of the value of transactions too, UPI saw an 8.61 per cent jump and processed record transactions worth ₹17.16 lakh crore compared with ₹15.80 lakh crore in the previous month. The transaction amount was up 42 per cent from a year ago.
On-year growth in UPI transactions has consistently remained over 40 per cent for the value of transactions and above 50 per cent for the volume of UPI trades in FY24 so far. In FY23, the UPI platform processed 8,376 crore transactions aggregating Rs ₹139 lakh crore, compared with 4,597 crore transactions worth ₹84 lakh crore in FY22.
Experts’ View
“The number of transactions in January 2018 was 151 million (15.1 crore); this reached 11 billion (1,100 crore) in October 2023. It will be no surprise if UPI transactions hit 20 billion (2,000 crore) a month in the next 18-24 months. What has made this growth sustainable and will be the driver going forward is the growth in Person-to-Merchant (P2M) transactions,” said Sunil Rongala, Senior Vice President, Head – Strategy, Innovation & Analytics, Worldline India.
Sachin Castelino, Chief Strategy and Transformation Officer, In-Solutions Global too said that UPI transactions are at a high due to increased digital adoption both at the customer and merchant level, and the continuous customer onboarding by third-party payment applications, including through incentive offers and programs.
The share of person-to-merchant (P2M) trades in overall UPI transactions rose to 57.5 per cent in June 2023 from 40.3 per cent in January 2022, and is expected to keep growing, according to Worldline India. During Jan-Jun, P2M transactions volume grew 119 per cent yoy to ₹2,915 crore and the value rose 72 per cent to ₹19 lakh crore. On the other hand, P2P transaction volume grew 22 per cent to 2,275 crore with the value of transactions rising 41 per cent to ₹64 lakh crore.
“As the festive season approaches and we progress through the third quarter, the anticipated surge in shopping and travel transactions is poised to drive a substantial uptick in UPI transaction volumes,” said Harish Prasad, Head of Banking- India, FIS.
UPI transactions are expected to breach 100 crore transactions per day by FY27, as per a report by PwC India, which projects UPI to dominate the retail digital payments landscape, accounting for 90 per cent of total transaction volumes over the next five years.