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4.6 Billion UPI Transactions Worth Rs 8.26 Lakh Crore Recorded In December Alone: Economic Survey 2021-22

UPI is the single largest retail payment system in India by volume of transactions. Half of these were small-ticket transactions of below Rs200, says the Economic Survey.

Financial transactions have seen fast growth over the past few years, with multiple avenues coming up in the digital payments sector. Among these, Unified Payments Interface (UPI) is currently the single largest retail payment system in the country in terms of volume of transactions, which indicates its wide acceptance, according to the Economic Survey 2021-22.  

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In December 2021, 4.6 billion transactions worth Rs8.26 lakh crore were carried out by UPI. In addition, 50 per cent of these were small-ticket transactions of below Rs200, according to the National Payments Corporation of India (NPCI).  

During the April-November 2021 period, UPI processed more than 24.26 million One Time Mandate transactions of value Rs44,381 crore, the Economic Survey noted. Increased usage had prompted the Reserve Bank of India (RBI) to raise the limit for such transactions from Rs1 lakh to Rs 2 lakh (March 2020) and then further to Rs5 lakh in December 2021.  

Given UPI’s success in India, several countries are adopting the payments system. Recently, RBI and the Monetary Authority of Singapore announced a project to link UPI and PayNow, which will start in July 2022. Bhutan recently became the first country to adopt UPI standards for QR codes, and the second country after Singapore to have BHIM-UPI acceptance at merchant locations, the Economic Survey report stated.  

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“The pandemic has accelerated the growth of digital payments in the country since 2020, with customers moving to digital payments owing to convenience and safety. Another major reason is rising awareness about digital payments across tier-2 and tier-3 locations and beyond towns and cities. Zero MDR (merchant discount rate) on UPI payments has also driven the adoption,” says Suhail Sameer, CEO, BharatPe, a fintech company that caters to small merchants and Kirana store owners in India.  

Wider Digital Push To Payments 

RBI has been promoting not just UPI but different modes of digital payments. “RBI has been making efforts to facilitate greater participation of retail customers in financial markets, where UPI, in addition to other options such as internet banking, can be used to make payments for participating in both the primary and secondary markets,” the central bank stated in December last year. Before that, on October 8, 2021, it had increased the daily limit of IMPS (Immediate Payment Service) transactions from Rs 2 lakh to Rs 5 lakh. This should further help in boosting digital payments, the Economic Survey 2021-22 report stated.  

However, with every technological innovation, there are inherent risks that can be exploited. This is evident in the increasing number of online financial fraud cases. “To address this risk, we need to have a two-pronged approach. One, aims to secure digital assets—information hosted on the Cloud—and two, invest in fraud detection and monitoring solutions to secure transactions. This part of the challenge is manageable as it will need financial institutions to ensure that they invest in the right security tools and adhere to cyber security hygiene,” says Kalpesh Doshi, chief information security officer-India, FIS. 

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