UPI Transactions Experience Marginal Drop to 1,330 Cr in April

In April 2024, UPI transactions saw a marginal dip of 1% compared to March, but surged by 50% YoY. Despite a decrease in transaction volume, the INR value indicated sustained growth.

April UPI Transaction Volume:

• UPI transactions experienced a slight decline of 1% month-on-month (MoM) in April 2024, totaling 13.30 billion compared to 13.44 billion in March.

• However, on a year-on-year (YoY) basis, the transaction count surged by an impressive 50%.

Transaction Volume in INR:

• The transaction volume in terms of value for April stood at INR 19.64 lakh crore, marking a decrease from INR 19.78 lakh crore recorded in March.

• Despite the monthly dip, the transaction volume increased by 40% year-on-year, indicating sustained growth in the UPI ecosystem.

RBI's Recognition and UPI's Growth Trajectory:

• Reserve Bank of India Governor Shaktikanta Das acknowledged the pivotal role of UPI in India's digital transactions landscape, attributing the country's substantial 46% share in global digital transactions to UPI usage.

• UPI transactions are projected to constitute over 80% of all digital payments in 2023, showcasing a remarkable growth trajectory from 43 crore transactions in 2017 to 11,761 crore transactions in 2023.

Expansion Beyond Borders:

• India's payment infrastructure, led by UPI, has extended its reach beyond domestic borders, with UPI services now available in countries like Nepal, France, New Zealand, among others.

Initiatives to Boost UPI Usage:

• Both the Indian government and the National Payments Corporation of India (NPCI) have rolled out initiatives to enhance UPI adoption.

• NPCI introduced various features and services such as UPI Lite, credit lines on UPI, UPI LITE X, Tap & Pay, Hello! UPI, and BillPay Connect to encourage UPI usage.

Cheaper Interchange Fee Consideration:

• NPCI is contemplating a more economical interchange fee structure for UPI transactions, potentially ranging from 1% to 1.2% per transaction.

• This fee would be significantly lower than the interchange cost for credit card transactions, which currently ranges from 1.8% to 2.2%.

Revisiting Market Share Cap:

• NPCI is evaluating the possibility of revising its decision to impose a 30% market share cap on payment companies offering UPI services by December 2024.

• Initially proposed in 2022, this cap aimed to encourage competition and prevent monopolization in the UPI ecosystem.