UPI transaction count has witnessed a surge of 49% on a YoY basis reaching a total of 13.9 billion in June 2024, as per the data provided by the National Payments Corporation of India (NPCI) on Monday. MoM analysis revealed that a jump of 5% was previously noted from 13.30 billion in April to 14.04 billion in May. Since the inception of UPI in 2016, the numbers hit an all-time high in terms of value and volume in May.
While the transaction volume surged 36% on a YoY basis, it shrank by 1.9% from 20.45 lakh crore in May to 20.07 lakh crore in June, the Immediate Payment Service (IMPS) transaction volume dropped by 7% from 558 million in May to 517 million in June. The average daily transaction amount hit Rs 66,903 with an average daily transaction count of 463 million for June. The volume of Aadhaar Enabled Payment System (AePS) increased by 11% from 95 million in April to 90 million in May.
During RBI’s Digital Payments Awareness Week program in Mumbai, RBI Governor Shaktikanta Das shared that India’s digital transaction volume has grown 90-fold in the last 12 years. From 162 crore digital payments in 2012-13, the numbers in 2023-24 till February have expanded to 14,726 crore. He noted that India’s share percentage in digital transactions on the global level stands at 46% with UPI transactions accounting for 80% of all digital payments in the country.
RBI has also expanded tokenization to include laptops, desktops, wearables, Internet of Things (IoT) devices, and card-on-file tokenization. The apex bank has joined Project Nexus of Bank for International Settlements (BIS), with the four ASEAN countries- Malaysia, Singapore, Philippines, and Thailand, to create a platform for smoothly facilitating cross-border retail payments. In the case of CDBC—direct benefit transfer DBT, offline and online retail payments, and cross-border remittances are applicable in India.
PwC Report on Digital Payments
A PwC report titled, “The Indian Payments Handbook-2021-26” estimates that UPI would continue to lead digital payments in India along with upcoming trends in the country’s payments ecosystem such as central bank digital currency (CBDC), buy now pay later (BNPL), corporate payments and offline payments. Poor network access for digital payments has sustained offline payments as well. In May, RBI launched UPI for feature phones, enrolling 400 million users of such phones to ease online payments.
The report also found the domestic digital payments market to grow at a compound annual growth rate (CAGR) of 23% in volume and hit 217 billion transactions in FY26. PwC adds that UPI transaction count is expected to reach 169 billion by 2025-26 at a CAGR of 122%, since 2018.
Breakdown of UPI Market Share
Around 94% of the market share of UPI, is held by the top three fintech firms with PhonePe having the largest share at 48%, Google Pay with 37%, and Paytm holding a 9% market share. NPCI has taken cognizance of a regulatory mandate, to limit any single payment platform’s UPI share to 30%, and also connected with prominent fintech firms with a small market share in UPI to expand their transactions.
PhonePe
PhonePe’s UPI transactions went up by 5.2% from 6 billion in February to 6.5 billion in March.
Google Pay
Google Pay’s transactions scaled by 6.3% from 4.4 billion in January, 4.7 billion in February, to 5 billion in March.
Paytm
The NPCI data has shown that Paytm has been losing its market share in UPI consistently, as the platform witnessed a slight decline in UPI transactions in March, processing 1.2 billion transactions in the month from 1.3 billion in February, and 1.4 billion in January. The fintech major has shifted its UPI payments to four large banks- Yes Bank, Axis Bank, State Bank of India, and HDFC Bank. Moreover, its associate entity—Paytm Payment Bank, ceased its basic banking services last month.
Cred
The 4th largest fintech firm, Cred, reported 132 million transactions in March, noting a surge in its market share in UPI from 1.5% to 2.3% in 2024. Cred user count has been at a standstill of 13 million since November 2022, even with its services extending beyond credit card payments to cover e-commerce, wealth management, travel, and automotive products and services in recent quarters. But the fintech firm‘s market share in UPI has doubled from 0.5% in April 2023 to 1% in the first three months of 2024.
The Indian government and NPCI have been actively engaged in promoting the adoption of UPI. The latter has introduced UPI features such as UPI Lite, UPI Lite X, credit lines on UPI, Tap & Pay, and Hello! UPI and BillPay Connect. Overall, the NPCI report has provided insights into the future of the digital payments landscape in India and the influencing factors in terms of transactions and customer spending behavior where UPI is set to lead the adoption despite the marginal drop from May to June in 2024.
