The Unified Payments Interface (UPI) closed the year 2022 on a high note as the number of transactions reached a record 7.82 billion in December and totalled Rs 12.82 trillion, also a record high.
The volume of transactions in December increased by 7.12 per cent when compared to November, while the value of transactions increased by 7.73 per cent during the same period, according to data issued by the National Payments Corporation of India (NPCI), the country's regulatory authority for retail digital payments.
According to NPCI data, approximately 74 billion transactions worth Rs 125.94 trillion were conducted using UPI in calendar year 2022. The platform handled more than 38 billion transactions totalling Rs 71.54 trillion in 2021. As a result, nearly 90 per cent more transactions took place on the platform in a year, and their average value increased by 76 per cent.
A little over three years after its inception in 2016, UPI crossed the 1 billion transaction threshold in October 2019. By October 2020, it grew to more than 2 billion transactions per month. Throughout the course of the next 10 months, UPI handled more than 3 billion transactions per month.
The number of transactions increased from 3 billion per month to 4 billion in the next three months. In the following six months, an additional 1 billion transactions were completed. In just four months, the number of transactions each month increased from 5 billion to 6 billion. The number of transactions surpassed 7 billion in the following three months.
In the last two years, UPI's popularity has multiplied to the point where, in volume terms, the platform currently processes more peer-to-merchant (P2M) transactions than peer-to-peer (P2P) transactions. UPI was previously mostly utilised for P2P transactions, but this usage pattern has drastically changed, and UPI is currently the most popular payment method for M2M transactions.
In 2022, UPI transactions have increased dramatically in both volume and value over the last year, demonstrating the success of UPI in India. “The main advantage of UPI is the convenience it brings with it. UPI allows money to be transferred between multiple accounts without needing separate profiles for each transaction, making it easy for the user to transact. Another reason behind UPI’s success is that it’s a simple, fast and secure way of transaction. UPI has been a major tool in driving financial inclusion,” says Dilip Modi, Founder of Spice Money, a rural fintech company.
Its use has grown not only in urban areas but also in the rural parts of India, helping masses to easily transact and avail services.