The Unified Payment Interface (UPI) of India is rapidly becoming the favorite payment system globally. An impressive aspect of this Indian payment system is its ability to overshadow even China’s dominance in the digital payment space. In just five months, UPI transactions soared to nearly $1 trillion, equivalent to ₹81 lakh crores. In contrast, payment systems in China and Brazil haven’t come close to matching these transactional figures.
As the world’s leading alternative payment system, UPI processed an astounding ₹80.8 lakh crores, or $964 billion, in transactions between April and July 2024, marking a year-over-year growth of 37%. This article delves deeper into the remarkable statistics surrounding UPI transactions around the globe.
Surpassing China and Brazil
According to the global payment center, PesaQR, UPI executed 117.6 billion transactions in 2023, averaging an astonishing 3,729.1 transactions per second—the highest in the world. UPI outperformed global payment platforms like China’s Alipay, PayPal, and Brazil’s PIX in transaction numbers. The average transactions per second in 2023 represented a 58% increase over the 2,348 transactions per second recorded in 2022. The cumulative value of transactions processed during 2023 reached $2.19 trillion.
Recent Peak Transactions
In July of this year, UPI recorded total transactions amounting to ₹20.64 lakh crores, or approximately $247 billion, making it the highest monthly transaction total achieved by the platform to date. Additionally, the value of processed transactions has consistently remained above ₹20 lakh crores for the past three months.
Many countries are utilizing alternative payment methods (APMs) in collaboration with central banks to create real-time payment options for customers. This has enabled a vast number of people to facilitate online payments and money transfers effortlessly. Recently, PesaQR investigated 40 leading alternative payment methods globally to determine their transaction processing rates.
Expansion of UPI and Future Prospects
PesaQR reports that UPI topped the list of alternative payment methods in terms of transaction volume. India is at the forefront of digital transactions, with over 40% of all payments being made digitally, predominantly through UPI.
Deepak Chand Thakur, co-founder and CEO of NPST, stated in media reports that they are integrating more channels into UPI. Consequently, the ability to conduct transactions across different platforms has significantly increased. Initially introduced as a convenient transaction tool, UPI has now incorporated credit cards, prepaid wallets, and prepaid vouchers into its ecosystem.
According to Thakur, UPI’s user base has grown from 300 million to over 400 million. Previously, transactions could only be processed through bank accounts, but interoperability has now greatly improved. This expansion in transaction channels has elevated UPI to the status of the most popular payment platform.
Rahul Jain, Chief Financial Officer of NTT Data Payments Services India, predicts that in the next 2-3 years, the growth in both the value and volume of UPI transactions will double. Several factors contribute to this, including the continuous launch of new products on the platform. Around 300 million individuals with smartphones still do not utilize UPI for payments, indicating considerable growth potential. The introduction of RuPay credit cards (virtual credit cards) and newly launched credit lines on UPI will further accelerate this growth.
Understanding Alternative Payment Methods (APMs)
Alternative Payment Methods (APMs) allow payments to be made without using bank debit or credit cards or cash. Due to their convenience and minimal charges, APMs have gained considerable popularity over recent years. Options included in APMs range from UPI, digital wallets, mobile payments, and online banking to voucher-based payment systems and “buy now, pay later” solutions.
Data shows that Skrill, a digital wallet used in over 100 countries, processed 49 billion transactions in 2023 or 1,553.8 transactions per second, placing it second globally in APM transaction volumes. Meanwhile, Brazil’s PIX, a real-time payment system similar to UPI, achieved 42 billion transactions or 1,331.8 transactions per second, making it the third-ranked. Alipay from China followed closely, with 36.5 billion transactions or 1,157.4 transactions per second, placing it fourth.
When Did UPI Begin?
The Unified Payment Interface (UPI) was developed by the National Payments Corporation of India to facilitate real-time fund transfers. Regulated by the Reserve Bank of India (RBI), it has been operational since 2016. According to PesaQR, nearly every country utilizes some form of alternative payment systems, with several central banks developing their own real-time payment options to enable citizens to make payments and transfer funds digitally.
