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UPI's share in India's digital payments jumps to 83%, RBI report says

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Jaya Vishwakarma
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upi growth rbi report

India’s Unified Payments Interface (UPI) continues to dominate the country’s digital transactions, surging from a 34% share in 2019 to 83% in 2024, according to the Reserve Bank of India’s latest payment system report.

Launched by the National Payments Corporation of India (NPCI) in April 2016, UPI consolidates multiple bank accounts into a unified mobile interface and uses virtual payment addresses (VPAs) for secure, user-centric transfers.

Over the past five years, the platform’s adoption has risen at a compound annual growth rate (CAGR) of 74%, making it the single largest retail payment system in terms of transaction volume.

Significant growth in transactions

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In 2018, UPI processed 375 crore transactions worth Rs 5.86 lakh crore. By 2024, that volume leaped to 17,221 crore transactions, with a total value of Rs 246.83 lakh crore.

According to the RBI, the figures represent CAGRs of 89.3% in volume and 86.5% in value over the last five years. During the same period, the share of other digital payment methods — such as RTGS, NEFT, IMPS, credit cards and debit cards — declined from 66% to 17%.

The report also emphasizes UPI’s role in “democratizing” digital finance, allowing even low-income or previously unbanked segments to adopt cashless payment solutions with minimal barriers.

P2P vs. P2M transactions

UPI supports both person-to-person (P2P) and person-to-merchant (P2M) payments. Until recently, P2P usage dominated in terms of volume; however, since 2023, P2M transactions have surpassed P2P in frequency.

The report notes that in value terms, P2P remains higher than P2M, suggesting consumers may use P2M for more frequent but lower-value retail purchases.

Low-value transactions (under Rs 500) rose notably. P2P payments increased from 394.26 crore in 2019 to 3,649.91 crore in 2024, at a five-year CAGR of 56%, but P2M showed even faster gains — 291.54 crore to 9,112.72 crore in the same period, representing a 99% CAGR.

Medium-value transactions (Rs 500–Rs 2,000) followed a similar pattern, with P2P volumes reaching 1420.57 crore and P2M growing to 1,106.24 crore. In high-value payments (above Rs 2,000), P2P climbed from 151.75 crore to 1452.81 crore, while P2M soared from 12.02 crore to 478.55 crore, a 109% five-year CAGR.

What led to the UPI growth?

The success of UPI can be attributed to its ease of use, instant money transfer, round-the-clock availability and robust security measures like two-factor authentication.

In 2018, the UPI 2.0 program introduced higher transaction limits (up to Rs 2 lakh), fund-blocking mandates, overdraft account integration and expanded memberships to cooperative banks.

Through 2019 and 2020, a recurring payment framework was established for cards, prepaid payment instruments and UPI Autopay, digitizing subscription-based transactions and recurring bill payments.

In March 2022, UPI123Pay was rolled out for feature phone users, offering digital payment options via IVR and missed calls. The same period saw UPI’s per-transaction limit rise from Rs 2 lakh to Rs 5 lakh for purchases such as government securities and IPO payments. 

Between 2022 and 2023, UPI Lite introduced an on-device wallet for small-ticket transactions (initially capped at Rs 200, later raised to Rs 500 per transaction), reducing the load on banks’ core systems. UPI Lite X built on this by allowing offline NFC-based payments where internet connectivity is weak. RuPay credit cards were also linked to UPI, expanding payment choices.

Meanwhile, single-block-and-multiple-debits functionality gave customers the option to block funds for specific purchases, withholding payment until goods or services are delivered.

“Hello! UPI,” which was introduced in September 2023, enables users to initiate transactions in a voice-based AI environment. Also, the system now facilitates credit lines from banks, allowing financing for UPI transactions at potentially lower cost and encouraging new financial products.

UPI to capture more growth

Analysts predict UPI’s share of India’s digital transactions may climb even higher as more banks and credit products integrate with the platform and new features target untapped markets.

Notably, UPI's success could serve as a blueprint for countries seeking to develop or upgrade their own digital payment infrastructures. 

Not to mention, the NPCI-developed digital payment system has already expanded its presence in other countries, including France, Sri Lanka, Mauritius, Singapore, Bhutan, Nepal, UAE, and the United Kingdom.

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