Did Daily UPI Transactions Exceed 700 Million for the First Time?

New Delhi, Aug 5 (NationPress) The daily unified payments interface (UPI)-based transactions have remarkably surpassed 700 million for the first time, reaching a total of 707 million, as per the latest data from the National Payments Corporation of India (NPCI).

This milestone was achieved on August 2. In the past two years, the frequency of daily transactions has doubled, despite a slowdown in growth compared to earlier periods.

In August 2023, UPI was handling approximately 350 million transactions daily, which surged to 500 million by August 2024.

The government has set an ambitious target of achieving 100 crore transactions per day for UPI, with projections indicating that this goal could be met next year if current growth trends continue.

To reach a billion transactions by next year, the UPI business model may need to reinstate merchant discount rates (MDR), according to insights from fintech firms and payment associations. They have urged the government to consider a nominal MDR for large merchants and high-value transactions.

While the government has reduced UPI subsidies from around Rs 4,500 crore in FY 24 to Rs 1,500 crore in FY 25, it has so far declined to implement the MDR request from within the ecosystem. Recently, the Reserve Bank of India (RBI) also expressed support for the MDR proposal from payment companies.

RBI Governor Sanjay Malhotra stated that the UPI interface must become financially sustainable. Currently, UPI remains free for users, with the government subsidizing costs for banks and other stakeholders involved in the payments framework. "Costs will have to be paid. Someone will have to bear the cost," he emphasized.

The MDR—a fee imposed on merchants by banks for processing digital payments, typically between 1 percent and 3 percent of the transaction amount—was waived for RuPay debit cards and BHIM-UPI transactions by the government in December 2019. It remains uncertain whether MDR will be reinstated or if users will have to shoulder the costs for UPI infrastructure.

The RBI Governor's remarks come as UPI has now surpassed global payment titan Visa in daily transaction volumes. Last month, UPI registered approximately 19.5 billion transactions totaling over Rs 25 lakh crore. This averages around 650 million transactions per day, equating to roughly Rs 83,000 crore daily. UPI now facilitates around 85 percent of all digital transactions in India and nearly 50 percent of all real-time digital payments globally.

As internet access expands and more consumers and businesses turn to digital payments, the platform is experiencing a monthly growth rate of 5-7 percent and an annual growth rate of about 40 percent.

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