Winning Bizness Desk
India's Unified Payments Interface (UPI) is rapidly becoming the world's preferred payment system, outshining even China's once-dominant platforms. In just five months, UPI has processed transactions nearing one trillion dollars (₹81 lakh crore), leaving the payment systems of China and Brazil trailing far behind. UPI, which has emerged as the world's most popular alternative payment method, handled transactions worth ₹80.8 lakh crore (approximately $964 billion) between April and July 2024. This represents a 37% year-on-year growth compared to the same period last year, solidifying its position as a global leader in digital payments.
UPI Outpaces Global Competitors
According to global payment center PaySecure, UPI processed an astounding 117.6 billion transactions in 2023, translating to 3,729.1 transactions per second—the highest in the world. This figure marks a significant increase from 2022, when UPI recorded 2,348 transactions per second. In comparison, global giants like China's Alipay and Brazil's PIX lagged behind, with UPI surpassing them in both transaction volume and value. In 2023, UPI's transaction value reached a staggering $2.19 trillion. July 2024 set a new record for UPI, with transactions totaling ₹20.64 lakh crore ($247 billion), the highest monthly figure ever recorded on the platform. Remarkably, the value of processed transactions has consistently exceeded ₹20 lakh crore for three consecutive months.
UPI's Expansion and Future Prospects
PaySecure's analysis highlighted UPI as the leading alternative payment method (APM) worldwide, reflecting India's dominance in digital transactions. Over 40% of payments in India are now digital, with UPI accounting for the majority. Deepak Chand Thakur, Co-founder and CEO of NPST, stated in a media report that UPI's expansion is ongoing, with new channels being added to the platform. Initially designed as a simple transaction tool, UPI now integrates credit cards, prepaid wallets, and vouchers, enhancing its functionality and user appeal. Thakur emphasized that UPI's user base has grown from 300 million to over 400 million, driven by increased interoperability and the addition of new transaction channels. This expansion has solidified UPI's status as the most popular payment platform in India. Rahul Jain, Chief Financial Officer of NTT Data Payments Services India, projected that UPI's growth will double in both value and volume over the next 2-3 years. He pointed out that around 300 million smartphone users in India are still not using UPI, indicating significant potential for further adoption. The introduction of new products, such as the RuPay virtual credit card and the credit line on UPI, is expected to fuel this growth.
Global Impact of APMs
APMs, or alternative payment methods, have gained immense popularity worldwide due to their convenience and low costs. These payment methods include real-time payment options like UPI, digital wallets, mobile payments, online banking, and buy-now-pay-later schemes. Skrill, a digital wallet used in over 100 countries, ranked second globally in APM transactions in 2023, with 49 billion transactions, or 1,553.8 transactions per second. Brazil's PIX, a real-time payment system similar to UPI, completed 42 billion transactions, or 1,331.8 transactions per second, during the same period. However, neither came close to matching the scale and efficiency of India's UPI.
