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UPI Transactions Surge 8% in December, Continuing Record-Breaking Growth

Unified Payments Interface (UPI) recorded a remarkable 16.73 billion transactions in December, amounting to Rs 23.25 lakh crore, marking an 8% increase in transaction volume and a 7.88% rise in transaction value compared to November. This continued growth has shown that UPI is not just a popular payment method, but an increasingly essential part of India’s digital economy.

UPI’s Impressive Growth in December

The December figures reveal the unrelenting expansion of UPI, with 16.73 billion transactions processed, surpassing the previous month’s performance of 15.47 billion. The value of these transactions also rose, hitting Rs 23.25 lakh crore, a growth of 7.88% compared to November. The volume growth reflects a consistent upward trajectory for India’s digital payment ecosystem.

On a year-on-year basis, the growth is even more remarkable. UPI saw a 39% increase in transaction volume compared to December 2023, while the transaction value surged by 28%. This year-on-year growth further highlights the increasing adoption of UPI across the country, driven by its ease of use and broad acceptance among users and merchants alike.

UPI digital payments

The average daily transaction volume in December stood at 540 million, with a total daily transaction value of Rs 74,990 crore. This was a substantial jump from November’s daily average of 516 million transactions and Rs 71,840 crore in transaction value. This is a clear sign that UPI is firmly cementing its position as the go-to payment solution for millions of Indians.

Leading Players in the UPI Market

As UPI transactions surge, it’s clear that the market has settled with a few dominant players. PhonePe remains the leader in terms of transaction volume, holding a significant 48% share of the market. Google Pay comes in second with a 37% share, while Paytm holds 7%. This dominance by a few players is unlikely to change soon, especially following the National Payments Corporation of India (NPCI) decision to extend the compliance deadline for Third Party App Providers (TPAPs) who exceed the volume cap in UPI. The new deadline extends until December 31, 2026, giving these players more time to meet the regulatory requirements.

This extension has sparked discussions about the future dynamics of the UPI ecosystem. The extended timeline ensures that there is no immediate disruption, allowing the current players to continue expanding their user base. While this might seem like a favorable move for incumbents like PhonePe and Google Pay, it also gives newer entrants a chance to catch up.

Interestingly, WhatsApp Pay, a relatively recent entrant in the UPI space, has also seen a breakthrough. The NPCI recently lifted the user onboarding limit for WhatsApp Pay, allowing it to extend UPI services to its entire user base across India. This could shake up the market in the coming months, as WhatsApp’s massive user base may significantly increase UPI transaction volumes on the platform.

UPI Expands Beyond India’s Borders

The internationalization of UPI is another noteworthy development. Currently, UPI payments are accepted in seven countries, including Bhutan, Mauritius, Nepal, Singapore, Sri Lanka, and France. This growing global footprint showcases UPI’s potential beyond India’s borders, helping promote the country’s digital payment infrastructure on the international stage.

According to recent media reports, NPCI is working on expanding UPI services to more countries. Qatar, Thailand, and other Southeast Asian countries are expected to be the next destinations for UPI’s global reach. The ability for Indian travelers and businesses to use UPI for cross-border transactions has enormous potential, not just for consumers but for boosting India’s digital economy on the world stage.

The growing number of countries that accept UPI underscores the platform’s potential to revolutionize global digital payments. It’s not just about simplifying payments for Indian users traveling abroad; it’s also a step towards greater financial inclusion in the regions where UPI is being introduced.

The Future of UPI: What’s Next?

As UPI continues to see tremendous growth, the question arises: what’s next for this revolutionary payment system? Given its rapid adoption, it’s clear that UPI is here to stay. However, challenges lie ahead. Competition between payment platforms is intensifying, and regulatory changes could impact the dynamics. As digital payments continue to evolve, the role of UPI in shaping India’s financial landscape will only grow.

The future of UPI will likely see even greater integration into various sectors, from retail to government services, as more businesses and organizations embrace digital transactions. In fact, with the potential expansion to more countries and the constant push for technological innovation, UPI’s influence on global payment systems may soon reach new heights.

India’s commitment to developing UPI as a powerful, secure, and efficient payment platform is unwavering, and the digital payment landscape will continue to evolve with it.

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