Bhim Unified Payments Interface (UPI) has crossed the 2-billion transaction mark in October 2020. According to the data released by the retail payments and settlement systems operator National Payments Corporation of India (NPCI), the UPI volume has grown 80 per cent from 1.14 billion transactions in October 2019 to 2.07 billion transactions last month. The transaction value has also jumped 101 per cent from Rs 1,91,359.94 crore to Rs 3,86,106.74 crore during the said period. From the financial year 2021 perspective, 999.57 million UPI transactions and value worth Rs 1,51,140.66 crore in April 2021 grew 107 per cent and 155 per cent respectively in October. “BHIM UPI has managed to change the face of person-to-person and person-to-merchant money transfers in the past few years while making them safer and more secure,” NPCI tweeted on Sunday.
Importantly, the transaction volume grew faster during the Covid and lockdown phases as people seemingly tried to avoid the use of cash that helped digital payments jump. Analysing the NPCI data showed that it took only eight months for volume to grow by 746 million from 1.3 billion transactions in February to 2.07 billion in October. In comparison, before Covid, similar volume growth took 14 months to reach the 1.3-billion mark in February this year from 620 million transactions in December 2018. The number of banks live on UPI also grew from 141 in October 2019 to 189 in October 2020.
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UPI is currently the biggest among the NPCI operated systems including NACH, IMPS, AEPS, BBPS, RuPay etc. NACH’s volume and value for September 2020 stood at 271.57 million and Rs 1,26,778 crore. Launched in April 2016, it took around three months for UPI adoption to kick off with 21 live banks then. In July 2016, UPI transaction volume stood at 90,000 while value was Rs 38 lakh.
India’s digital payments industry is likely to grow from Rs 2,153 trillion at 27 per cent CAGR to Rs 7,092 trillion by 2025, according to a RedSeer analysis. The growth is likely to come on the back of strong use case of merchant payments, government policies including Jan Dhan Yojana, personal data protection bill along with the growth of MSMEs, low penetration of banking and financial services in India; growth of millennials and high smartphone penetration suggesting strong headroom for growth.