The number of UPI based transactions crossed 70 crores in a day for the first time
New Delhi: According to the latest data from the National Payments Corporation of India (NPCI), the number of Unified Payments Interface (UPI) based daily transactions has reached 707 million for the first time. This milestone was achieved on August 2 this month.
In the last two years, the number of daily transactions has doubled, however, this growth has been slower than in previous years. In August 2023, UPI was recording around 35 crore transactions per day, which increased to 50 crore daily transactions in August 2024.
The government has set a target of achieving 100 crore transactions per day for UPI and expects the platform to reach this target next year with the current growth rate. According to fintech companies and payment associations, UPI’s business model should re-implement the Merchant Discount Rate (MDR) to achieve one billion transactions by next year.
They requested the government to set marginal MDR for major merchants and high-value transactions. The government reduced the subsidy for UPI from about Rs 4,500 crore in FY24 to Rs 1,500 crore in FY25, but refused to accept the MDR demand of this ecosystem.
Recently, the Reserve Bank of India (RBI) also supported the MDR demand of payment companies. RBI Governor Sanjay Malhotra recently said that the UPI interface should be made financially sustainable.
The UPI system is currently free for users and the government bears the cost by subsidizing banks and other stakeholders supporting the payment framework. He said, “Somebody has to bear this cost.”
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‘MDR’ is a fee charged by banks to merchants for processing digital payments, which usually ranges from 1 per cent to 3 per cent of the transaction value. It was waived on RuPay debit card and BHIM-UPI transactions by the government in December 2019. It is not clear whether MDR will be reintroduced or users will also have to bear the cost of UPI infrastructure. The RBI governor’s remarks come at a time when UPI has surpassed global payments giant Visa in terms of daily transaction volume.
Last month, UPI recorded around 19.5 billion transactions worth over Rs 25 lakh crore. This means that there are an average of about 650 million transactions a day and its daily value is around Rs 83,000 crore.
UPI now drives around 85 per cent of all digital transactions in India and about 50 per cent of all real-time digital payments worldwide. As internet penetration is increasing and more and more consumers and businesses are adopting digital payments, the platform is witnessing a growth of 5-7 per cent on a monthly basis and 40 per cent on a yearly basis.
