On Monday, the National Payments Corporation of India (NPCI) announced on its official Twitter handle that the number of Unified Payment Interface (UPI) transactions had shot up to 620.17 million in December 2018, up 18% from 524.94 million in the preceding month. The total count for 2018 reportedly stands at 3 billion.
In terms of the value of these transactions, the growth has been even more impressive: A 25% increase (month-on-month) to cross the Rs 1 lakh crore milestone in December for the first time.
Experts told Business Today that though UPI is just two years old, it will gradually eat into IMPS and NEFT payments, which together account for Rs 181 lakh crore in transactions value in a year. Similarly, UPI is poised to overtake card payments, including prepaid payment instruments. According to the recent RBI data, card transactions in the month of October saw a 9% jump in volume to 1.4 lakh crore and 12% increase in value to over Rs 4 lakh crore.
In 2017-18, total card payments stood at Rs 10,60,700 crore. More than the traditional banks such as SBI, ICICI and HDFC Bank, it is the new players such as Reliance Jio, WhatsApp, Amazon Pay and Google Pay that are stirring up a storm around UPI. On the other hand, the government's UPI app, Bharat Interface for Money (BHIM) has seen a declining share in UPI transactions. In December, BHIM notched up transaction volume of 17.35 million and value of Rs 7,981.82 crore.
UPI is not only aiding in peer-to-peer transactions but is now also helping in peer-to-merchant transactions. "UPI is cost-efficient and asset-light, compared to other alternatives and, in most cases, it can be activated by the recipient (merchant or business) on a self-serve model. It is indeed a much-needed feature added to a platform," Mahesh Makhija, leader-digital & emerging technology, EY India, told the daily.
According to stakeholders, the biggest disruptor among the new UPI 2.0 features is the one-time mandate feature, which makes the payment experience much more seamless, while giving greater control to customers.Furthermore, the apex bank has announced that wallets will soon be interoperable through UPI, which is expected to greatly boost the payment system as well as digital payments at large. The daily added that mobile wallet transactions for October stood at 368.45 million with a value of Rs 18,786 crore, up 25% and 13.5%, respectively, over the previous month.
Edited by Sushmita Agarwal