RBI Report: UPI Dominates India’s Digital Payments with 83% Share
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Synopsis
As per the RBI's payment system report, UPI's share in India's digital payments has dramatically increased from 34% in 2019 to 83% in 2024, reflecting a CAGR of 74% over five years.
Key Takeaways
- UPI share surged to 83% in 2024.
- Other payment methods dropped to 17%.
- UPI transaction volume rose to 17,221 crore.
- UPI P2M transactions outpaced P2P in volume.
- UPI Lite transactions reached 2.04 million daily.
Mumbai, Jan 28 (NationPress) The share of the Unified Payments Interface (UPI) in India's digital payments has skyrocketed from 34 percent in 2019 to an astounding 83 percent in 2024, showcasing a remarkable CAGR (cumulative average growth rate) of 74 percent over the past five years, according to the RBI's payment system report.
In contrast, the share of other payment methods, such as RTGS, NEFT, IMPS, credit cards, and debit cards, has declined from 66 percent to 17 percent during the same timeframe, as stated in the report.
UPI has emerged as the key driver of digital payments growth in India due to its convenience and user-friendliness, the report highlights.
At a macro level, the volume of UPI transactions surged from 375 crore in 2018 to 17,221 crore in 2024. Meanwhile, the total value of transactions jumped from ₹5.86 lakh crore in 2018 to ₹246.83 lakh crore in 2024.
This reflects a five-year CAGR of 89.3 percent and 86.5 percent in terms of volume and value, respectively, as noted in the report.
Both P2P (person-to-person) and P2M (person-to-merchant) transactions utilize UPI's secure and real-time payment capabilities, simplifying financial transactions for individuals and businesses without depending on traditional, slower methods.
Since 2023, the volume of UPI P2M transactions has outstripped that of UPI P2P transactions. However, in terms of value, UPI P2P transactions still surpass P2M values.
Recent years have seen a phenomenal rise in digital payments in India, primarily driven by the impressive advancement of UPI and an array of digital payment options. In 2024 alone, India registered 208.5 billion digital payment transactions.
UPI P2M transactions grew at a CAGR of 99 percent for transaction values below Rs 500 from 2019 to 2024. In comparison, UPI P2P transactions recorded a CAGR of 56 percent in the same period.
For transactions exceeding Rs 2,000, UPI P2M has shown a CAGR of 109 percent, while UPI P2P achieved a CAGR of 57 percent during the last five years.
The National Payments Corporation of India (NPCI) reported that its low-value transaction payment method, UPI Lite, achieved 2.04 million transactions daily, valued at Rs 20.02 crore in December 2024.
“The introduction of UPI Lite by Paytm and PhonePe on February 15 and May 2 of 2023, respectively, has resulted in a sustained increase in UPI Lite payment volumes and values,” the RBI report notes.
“UPI has positioned India at the forefront of digital payment solutions as a ‘public good’. This approach has the potential to be adopted by other economies, regardless of their developmental stage. UPI and its functionalities provide insights into the democratization of the payment system, reaching the smallest values and penetrating previously underserved segments,” the report concludes.
