India has witnessed an exceptional surge in Unified Payments Interface (UPI) transactions, reaching a staggering 8,572 crore by December 11, 2023, marking a significant shift towards digital transactions. This growth is part of a larger trend, with UPI transactions surging from 92 crore in FY 2017-18 to 8,375 crore in FY 2022-23, showcasing a compound annual growth rate (CAGR) of 147% in terms of volume.
UPI has not only become the driving force in India's digital payment landscape, accounting for 62% of digital payment transactions in FY 2022-23, but it has also seen a substantial increase in transaction values. Starting at ₹1 lakh crore in FY 2017-18, the value of UPI transactions has risen to ₹139 lakh crore in FY 2022-23, reflecting a CAGR of 168%.
This remarkable growth aligns with strategic efforts by the government and the Reserve Bank of India (RBI) to promote digital transactions and financial inclusion. Initiatives include incentive schemes for RuPay Debit cards and low-value BHIM UPI transactions, advisories to enhance payment acceptance infrastructure, and the allocation of digital payment targets to banks.
The Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) has played a crucial role in boosting digital literacy in rural India, complemented by RBI's awareness and training programs like Electronic Banking Awareness and Training (e-BAAT), Digital Payments Awareness Week, and the mission 'Har Payment Digital,' aimed at making every Indian aware of digital payments.
In a recent development, the RBI has permitted the linking of RuPay credit cards to UPI, providing consumers with significant advantages. This allows RuPay credit card holders to seamlessly utilize UPI QR codes, eliminating the need for a physical card and enabling credit card transactions even at small merchant outlets equipped with QR codes, enhancing convenience
The decline in year-on-year growth in the value of bank notes in circulation, from 9.9% in FY 2021-22 to 7.8% in FY 2022-23, underscores the increasing preference for digital transactions in the country.
Prachee Suman | 19-12-23 | New Delhi
