UPI Sets New Record with 16.73 Billion Transactions in December

In December 2024, Unified Payments Interface (UPI) transactions hit a new milestone, with 16.73 billion transactions processed, marking a significant 8.08% increase compared to 15.48 billion in November. This impressive growth demonstrates the continued expansion and adoption of digital payments across India, further solidifying UPI's role as a cornerstone of the nation's payment ecosystem.

Growth in UPI Transactions: Month-on-Month and Year-on-Year

 In comparison to the preceding month, December's UPI transaction volume surged by 8.08%, reaching 16.73 billion, surpassing the October 2024 figure of 16.58 billion transactions. October had seen a 10% growth month-on-month (MoM), and December’s performance represented a further 0.9% increase from October.

According to data from the National Payments Corporation of India (NPCI), UPI transactions in December 2024 amounted to INR 23.25 lakh crore, marking a 7.9% increase from INR 21.55 lakh crore in November. The year-on-year (YoY) growth in transaction volume was even more remarkable, witnessing a substantial increase of 39%. This reflects not just the widespread adoption of UPI, but also its growing role in the daily financial activities of Indian citizens.

Average Daily Transactions and Future Projections 

The average number of daily UPI transactions also saw an increase in December, rising to 540 million from 516 million in November. This uptrend aligns with the prediction made by RBI Governor Shaktikanta Das, who forecasted that UPI transactions would soon reach the 1 billion mark per day, an impressive leap from the current daily volume of around 500 million transactions.

This projected growth indicates a growing confidence in digital payments and the increasing use of UPI for both small and large-scale transactions. The technological infrastructure supporting UPI has played a pivotal role in enabling this rise, allowing seamless, secure, and fast payments.

Market Share: Dominance of PhonePe and Google Pay 

The UPI ecosystem continues to be dominated by fintech giants, with PhonePe and Google Pay maintaining their strong positions in the market. As of August 2024, PhonePe held a dominant 48.4% market share, while Google Pay followed closely with 37.3%. Together, these two players continue to shape the digital payments landscape in India, making UPI transactions accessible to millions of users across the country.

Both PhonePe and Google Pay have expanded their services beyond basic payments, offering features such as bill payments, recharges, and even financial products. Their widespread adoption by users of all demographics has played a significant role in UPI's success.

Global Expansion of UPI: International Adoption 

The government of India has been actively promoting UPI on the global stage, and this initiative has been gaining traction. In July 2024, Prime Minister Narendra Modi announced plans to integrate UPI with Malaysia's national payments network, PayNet, marking a significant step in India’s efforts to expand the reach of UPI internationally. Several other countries, including Sri Lanka, Mauritius, Bhutan, Nepal, the UAE, and Canada, have already adopted India's UPI payment model to varying extents.

The global expansion of UPI signifies not just a technological achievement, but also a geopolitical milestone for India, as it enhances the country's influence in the digital payment space. UPI's adoption abroad will likely drive further innovation and partnerships, benefiting both India and the nations that integrate the system.

Recent Policy Changes: Increased Transaction Limits

 To keep pace with the growing popularity of UPI, the Reserve Bank of India (RBI) has introduced several policy changes. In a significant move, the RBI increased the cap on transactions processed via UPI 123Pay from INR 5,000 to INR 10,000. UPI 123Pay, introduced in 2022, is a service designed for feature phone users, allowing them to access UPI services without requiring an internet connection. This service is available in 12 different languages, making it more accessible to users across rural and underserved regions.

Similarly, the transaction limit for UPI Lite has been increased from INR 500 to INR 1,000. UPI Lite allows for smaller, low-value transactions to be completed more quickly and efficiently, making it ideal for users making frequent small payments.

Conclusion: UPI’s Growth and Future Outlook 

The growth of UPI in December 2024, both in transaction volume and daily usage, underscores the system’s growing dominance in the Indian payment landscape. With continued improvements in infrastructure, policy changes, and international expansion, UPI is well on track to further solidify its position as one of the leading payment platforms not only in India but globally. The government's support, along with the dominance of players like PhonePe and Google Pay, will ensure that UPI remains a key player in digital finance for years to come.