The value of Unified Payment Interface (UPI) transactions in May hit a record high of ₹14.3 lakh crore, clocking nearly 2% growth compared with ₹14.07 lakh crore in April. The National Payments Corporation of India (NPCI) provided the information on its official Twitter handle.

“Celebrating a milestone moment! We've crossed a phenomenal 9 billion transactions on UPI in the month of May’23, & it's all thanks to you, India! Together, we are shaping the future of payments. Let's continue this journey of growth and innovation!” the NPCI tweeted.

The value of transactions processed through UPI in May jumped 37% on a year-on-year basis.

In terms of volume, the number of UPI transactions increased to 941 crores in May compared with 889 crores in April.

UPI is the single largest retail payment system in India in terms of volume of transactions and has become one of the most inclusive modes of payment in India.

This trend in UPI transactions is further likely to continue as the count is expected to reach 1 billion per day by 2026-27, accounting for 90 percent of the retail digital payments in the country, said a PwC India report.

The report titled "The Indian Payments Handbook – 2022-27" stated that UPI accounted for about 75 percent of the total transaction volume in the retail segment during 2022-23. 

The Indian digital payments market saw steady growth at a CAGR of 50 percent (volume-wise) and is expected to reach 411 billion transactions in FY 2026-27 from 103 billion in FY 2022-23, the report said.

"It is estimated that UPI will record 1 billion transactions per day by FY2026–2027, going from 83.71 billion transactions in 2022-23 to 379 billion transactions by 2026-27," it added.

It further said the credit card segment continues to grow at a healthy rate, as card (both debit and credit) payment is one of the most used instruments for retail digital payments after UPI. The volume of transactions in credit cards is expected to surpass debit cards by FY 2024–2025.

While credit card issuance is expected to grow at a healthy CAGR of 21 percent in the next five years, debit card issuance is expected to have a stagnant growth with a CAGR of 3 percent in the same period, the report said.

The PwC report further said revenue through the credit card business accounts for nearly 76 percent of the overall cards' revenue in 2022–2023, making it a lucrative business segment for banks, NBFCs, and FinTech.

Image source: Hindustan Times