In a significant leap towards a digital economy, Unified Payments Interface (UPI) transactions have witnessed an extraordinary surge, marking a substantial shift in the country’s payment landscape. According to data shared by the Union Minister of State for Finance, Dr Bhagwat Karad, UPI transactions have experienced exponential growth both in terms of volume and value.
Table of Contents
Stellar Growth in UPI Transactions
Since the financial year 2017-18, UPI transactions have not only increased in volume but have also seen a remarkable rise in their overall value. From 92 crore transactions in FY 2017-18, UPI transactions soared to an astounding 8,375 crore in FY 2022-23, achieving a Compound Annual Growth Rate (CAGR) of 147% in terms of volume.
The value of UPI transactions has mirrored this extraordinary growth, climbing from ₹1 lakh crore in FY 2017-18 to an impressive ₹139 lakh crore in FY 2022-23. The CAGR for the transaction value stands at an impressive 168%, showcasing the increasing preference for digital payment methods.
For the current financial year up to December 11, 2023, UPI has already notched up a substantial 8,572 crore transactions, solidifying its position as a key driver of the digital payment revolution. In FY 2022-23, UPI accounted for a staggering 62% of all digital payment transactions, further underlining its dominance in the rapidly evolving financial landscape.
Decrease in Year-on-Year Growth of Bank Notes
As UPI transactions surge, traditional bank notes are experiencing a different trajectory. The Year-on-Year growth in the value of banknotes in circulation has seen a decrease from 9.9% in FY 2021-22 to 7.8% in FY 2022-23. This shift suggests a gradual shift towards digital transactions, with UPI leading the charge.
Government Initiatives Boosting Digital Transactions
The government has played a pivotal role in promoting digital transactions and implementing various initiatives to drive the adoption of digital payment methods. These initiatives include incentive schemes for RuPay Debit cards and low-value BHIM UPI transactions, advisories to improve payment acceptance infrastructure, and the allocation of digital payment transaction targets to banks.
The Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) has been instrumental in enhancing digital literacy in rural areas, while awareness programs such as Electronic Banking Awareness and Training (e-BAAT) and Digital Payments Awareness Week have been conducted nationwide. The Mission ‘Har Payment Digital’ seeks to make every individual in India aware of digital payments, with a focus on safety, security, and convenience.
RBI’s Role in Driving Digital Adoption
The Reserve Bank of India (RBI) has been actively promoting digital banking through various programs. The linking of RuPay credit cards to UPI has been a recent development, offering consumers the advantage of using their credit cards seamlessly through UPI QR without the need for a physical card. This move aims to facilitate digital transactions even at smaller merchant outlets with QR codes.
RBI’s initiatives such as the ’75 Digital Villages’ program and multimedia awareness campaigns under ‘RBI Says’ or ‘RBI Kehta Hai’ further contribute to creating awareness about digital payment initiatives and ensuring customer safety and convenience.
In the wake of this digital transformation, UPI has emerged as a game-changer, redefining the way transactions are conducted in India. With the government’s concerted efforts and the Reserve Bank of India’s strategic measures, the shift towards a digital economy appears to be accelerating. As UPI continues to break records, it signifies not just a change in payment methods but a broader shift in the financial habits of a nation on the cusp of a digital revolution.
