UPI dominates digital Payments, drives financial inclusion
text_fields
New Delhi: Amid a surge in digital payments where nearly four out of five payments in the country were conducted on the Unified Payments Interface (UPI) in FY24, UPI has emerged as the dominant force driving financial inclusion, merchant adoption and cross-border transactions.
According to a recent report, UPI has become the driving force behind India's digital transactions, accounting for 84% of all digital payments in the country.
The report by The Digital Fifth, a fintech consulting and advisory firm states that UPI represents more than just a payment system — it’s an entire financial ecosystem shaping India’s digital-first economy.
"With UPI handling 16 billion transactions a month and projected to grow 3x by the end of 2030, the role of robust, high-resilience switching infrastructure becomes paramount,” said Sameer Singh Jaini, Founder and CEO of The Digital Fifth.
To support India's transition to a cashless and globally connected economy, he emphasizes that real-time fraud detection, cloud-native architecture, and scalable, dual-core switches are no longer optional, but necessities for frictionless, secure and reliable digital payments.
UPI transactions have seen exponential growth, increasing fourfold from 2021 to 2024 and reaching 172 billion transactions per year. It now dominates digital payments, far outpacing card-based and wallet transactions.
The report highlights that over 30 million merchants are now onboarded on UPI, and the merchant-to-consumer (P2M) segment is growing at 67 per cent on-year, outpacing peer-to-peer (P2P) transactions and signalling UPI’s transition into the primary retail payment system.
According to the RBI, digital payments across India recorded a double-digit jump of 11.1 per cent year-on-year (YoY) as of September 2024.
The report reveals that the share of UPI in the country's digital payments has increased from 34 per cent in 2019 to an impressive 83 per cent in 2024, with a remarkable CAGR (cumulative average growth rate) of 74 per cent over the last five years.
At a macro level, the volume of UPI transactions increased from 375 crore in 2018 to 17,221 crore in 2024, whereas the total value of transactions surged from Rs 5.86 lakh crore in 2018 to Rs 246.83 lakh crore in 2024.
inputs from IANS