Unified payments interface (UPI) started 2024 on a strong note, with transaction spends staying over the ₹18-lakh crore mark and touching a new record high.

Transactions worth ₹18.41-lakh crore were processed during January, nearly 1 per cent higher than the previous record of ₹18.23-lakh crore in December 2023. The value of transactions was 42 per cent higher on year, as per data by the National Payments Corporation of India (NPCI).

The number of transactions on the UPI network remained flat on month at 1,202 crore for January. On year, the volume of transactions was 52 per cent higher.

On-year growth in UPI transactions has consistently remained over 40 per cent for the value of transactions and above 50 per cent for volume of UPI trades in 2023 and FY24 so far. In FY23, the UPI platform processed 8,376 crore transactions aggregating ₹139-lakh crore. Over 11,765 UPI transactions worth ₹182.25-lakh crore were processed in 2023, up 59 per cent in terms of volume and 45 per cent in terms of value compared with 2022.

“UPI transactions and volumes have been reaching a new milestone number month-on-month. The 52 per cent y-o-y increase in transaction volumes can be attributed to the increasing number of UPI users and payment touchpoints,” said Mandar Agashe, Founder & MD, Sarvatra Technologies.  

Growth drivers

A shift in consumer behavior of moving away from traditional cash transactions, increased convenience through value-added features, digital adoption by merchants through third-party payment applications, and rising share of P2M (person-to-merchant) transactions is driving UPI growth, according to market participants, some of whom expect UPI transactions to breach 2,000 crore in the next 18-20 months.

Akshay Mehrotra, Co-founder and CEO, Fibe, said the month-on-month rise in UPI transactions is a testament to the convenience and financial flexibility it has brought about, in addition to the RBI’s proposal to hike UPI transaction limit for hospitals and schools, which has opened “a new chapter in customer convenience”.

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.