According to the most recent data from the National Payments Corporation of India (NPCI), the number of daily transactions based on the universal payments interface (UPI) has surpassed 700 million for the first time, reaching 707 million.

On August 2, the accomplishment was accomplished. Even while growth has slowed compared to prior years, the number of daily transactions has doubled over the last two years.

UPI recorded about 350 million transactions per day in August 2023; by August 2024, that number had risen to 500 million transactions per day.

If UPI continues to develop at its current rate, it is expected to surpass the government’s aim of 100 crore transactions per day next year.

According to fintech companies and payment groups, UPI’s business model should reinstate merchant discount rates (MDR) in order to reach one billion transactions by the following year. They requested that the government set up a marginal MDR for high-value transactions and significant businesses.

The government rejected the ecosystem’s MDR demand even though it cut UPI subsidies from about Rs 4,500 crore in FY 24 to Rs 1,500 crore in FY 25. The Reserve Bank of India (RBI) recently expressed support for payment companies’ MDR demand.

Sanjay Malhotra, the governor of the RBI, recently stated that the UPI interface needs to be made commercially viable. Users can now use the UPI system for free because the government pays for it by subsidizing banks and other parties that support the payments infrastructure. “Expenses must be covered. The expense will have to be borne by someone,” he continued.

The government abolished the MDR, a tax that banks charge businesses for processing digital payments and usually ranges from 1% to 3% of the transaction value, for RuPay debit cards and BHIM-UPI transactions in December 2019. It’s unclear if users will also be responsible for paying for UPI infrastructure or if MDR will be reinstated.

The RBI Governor made these remarks when UPI’s daily transaction volumes overtook those of Visa, the world’s largest payments company. Around 19.5 billion transactions totaling more than Rs 25 lakh crore were registered by UPI in the past month.

This amounts to over 650 million transactions every day on average, with a daily value of approximately Rs 83,000 crore. Approximately 85% of all digital transactions in India and 50% of all real-time digital payments worldwide are currently powered by UPI.

The platform sees monthly growth of 5–7% and annual growth of roughly 40% as internet penetration rises and more businesses and consumers embrace digital payments.