UPI’s Share in India’s Digital Payments Soars to 83%: A Remarkable Surge, Says RBI Report

Mumbai: The Unified Payments Interface (UPI) has become the dominant force in India’s digital payments landscape, accounting for a staggering 83% of the country’s total digital payment transactions in 2024, according to the Reserve Bank of India’s (RBI) Payment System Report.

This impressive rise from 34% in 2019 demonstrates a phenomenal growth trajectory, with UPI’s share surging at a cumulative annual growth rate (CAGR) of 74% over the past five years.

UPI’s Dominance in India’s Digital Payments Ecosystem

In stark contrast, the share of other traditional payment systems such as Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS), credit cards, and debit cards has significantly declined from 66% to just 17% in the same period.

This shift highlights the central role UPI has played in revolutionizing the digital payments space in India, owing to its convenience, speed, and low cost.

The RBI report underlines UPI’s pivotal role in India’s digital transformation.

The platform has become the go-to solution for both peer-to-peer (P2P) and peer-to-merchant (P2M) transactions, owing to its secure and real-time processing capabilities that allow individuals and businesses to carry out financial transactions effortlessly, without the delays associated with traditional banking methods.

UPI’s Incredible Growth: Transaction Volume and Value

From 2018 to 2024, the volume of UPI transactions has surged dramatically, skyrocketing from 375 crore (3.75 billion) transactions in 2018 to an eye-watering 17,221 crore (172.21 billion) transactions in 2024.

Correspondingly, the total value of transactions has surged from ₹5.86 lakh crore in 2018 to ₹246.83 lakh crore in 2024, marking an extraordinary leap in both volume and value.

This phenomenal growth translates to a year-over-year CAGR of 89.3% in transaction volume and 86.5% in transaction value, reflecting the rising adoption of UPI across all sectors of the economy.

With the increasing integration of UPI into various sectors such as retail, utilities, and government services, it has emerged as a cornerstone of India’s cashless economy.

P2M Transactions Surpass P2P in Volume, But P2P Remains Higher in Value

While UPI’s peer-to-merchant (P2M) transactions have seen higher growth rates in terms of volume, surpassing peer-to-peer (P2P) transactions in 2023, P2P transactions still dominate in value terms.

This indicates that while smaller transactions are becoming more common for merchant payments, high-value P2P transactions continue to play a significant role, especially in the realm of personal financial transfers.

UPI Lite: A Game-Changer for Low-Value Transactions

A key development in India’s digital payment ecosystem has been the introduction of UPI Lite, a low-value transaction system launched by the National Payments Corporation of India (NPCI).

UPI Lite allows users to make small, quick transactions without the need for internet connectivity, making it ideal for rural areas and for people with limited access to data services.

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In December 2024, UPI Lite recorded 2.04 million transactions daily, valued at ₹20.02 crore. The launch of UPI Lite by major digital payment platforms like Paytm and PhonePe has further boosted UPI’s adoption, with the number of UPI Lite transactions steadily rising since its introduction in 2023.

UPI’s Contribution to India’s Digital Payment Revolution

The RBI report highlights that UPI’s success is not just limited to India but is a model that can be adopted by other nations at varying stages of development.

By democratizing access to digital payments, UPI has made it possible for individuals, including those in remote areas, to access financial services without the need for physical bank branches or expensive infrastructure.

India’s approach to UPI as a public good—free and universally accessible to all citizens—has made it a global benchmark for digital payment systems. The ease of use, security features, and ability to handle both small and large transactions have made UPI the most preferred payment method for millions of Indians.

Digital Payments Surge in India: A Look at the Numbers

The explosion of digital payments in India is evident in the latest statistics, with the country recording an impressive 208.5 billion digital payment transactions in 2024 alone.

This surge can largely be attributed to the widespread use of UPI, which has been integrated into everything from utility bill payments to retail purchases and government welfare schemes.

The rapid growth of UPI is also reflected in the growth of UPI P2M transactions, especially those with values below ₹500, which grew at an extraordinary CAGR of 99% between 2019 and 2024.

Meanwhile, higher ticket-sized transactions exceeding ₹2,000 also saw a significant rise, with UPI P2M transactions growing at a CAGR of 109% during the same period.

UPI’s Role in Digital Financial Inclusion

What sets UPI apart from traditional payment systems is its role in fostering digital financial inclusion. The platform has enabled millions of previously unbanked and underbanked individuals to engage in digital transactions.

By offering low-cost, quick, and secure transaction options, UPI has significantly contributed to India’s vision of a cashless society, where financial inclusion and access to services are no longer restricted by geographical or socioeconomic barriers.