The Unified Payments Interface (UPI) has crossed the $1-trillion mark in transaction values for the financial year 2021-22.
The payments system crossed the $5 billion transaction mark last march. The covid-19 pandemic time has seen a large number of people resorting to digitalised banking apps. As of now, Rs 9 lakh crore worth of monthly transactions are being done through the UPI interface.
According to data released by the National Payments Corporation of India (NPCI), which operates UPI, 5.04 billion transactions were processed on the platform until March 29, amounting to Rs 8.88 lakh crore, which was a growth of over 7 per cent compared to February. UPI remains the preferred choice largely for low-value transactions. According to NPCI’s assessment, 50% of the transactions recorded on UPI are worth less than Rs 200 each. The NPCI chief said there is a large number of merchants who are accepting digital payments, including the smaller merchants, which is well over 50 million.
The NPCI is nearly ready for a pilot launch of wallet-based UPI payments. Named ‘UPI Lite’, the on-device wallet service will be in line with the Reserve Bank of India’s (RBI) framework for offline digital payments. It will enable transactions of up to Rs 200 at a time with wallet balances capped at Rs 2,000. The cash in circulation is about ₹30 lakh crore. While it has been increasing constantly, digital payments are also increasing, even as cash is still high.
In the future, UPI would be processing a billion transactions a day, and to enable that, a number of initiatives have been introduced. Chief among these is UPI’s AutoPay feature, which has already seen increased adoption owing to RBI’s disruptive guidelines on recurring mandates. The RBI has announced a UPI feature on phones without an Internet connection, which is expected to open up the payments system to more than 40 crore individuals. This will expand digital financial inclusion and add to the number of transactions made on the platform.
