UPI emerged as the major factor driving financial inclusion in India
In the midst of a spike in digital payments, with over four out of every five payments in the country done via the Unified Payments Interface (UPI) in FY24, UPI has emerged as the dominating force driving financial inclusion, merchant adoption, and cross-border transactions.
According to a new industry report, UPI now accounts for 84 percent of all digital transactions in India.
According to a report by fintech consulting and advising firm The Digital Fifth, UPI is more than simply a payment system; it is a whole financial ecosystem that is transforming India’s digital economy.
“With UPI handling 16 billion transactions per month and expected to triple by the end of 2030, the role of robust, high-resilience switching infrastructure becomes paramount,” says Sameer Singh Jaini, Founder and CEO of The Digital Fifth.
Real-time fraud detection, cloud-native architecture, and scalable, dual-core switches are no longer options; they are required to ensure seamless, safe, and fail-proof digital payments as India progresses toward a completely cashless, globally linked economy, he stated.
Between 2021 and 2024, UPI transactions increased fourfold, reaching 172 billion per year. It now dominates digital payments, outperforming card-based and wallet transactions.
With over 30 million merchants onboarded on UPI, the merchant-to-consumer (P2M) segment is increasing at a 67% annual rate, exceeding peer-to-peer (P2P) transactions and signaling UPI’s transition into the primary retail payment system, the report stated.
According to the RBI, digital payments in India grew by 11.1% year on year (YoY) in September 2024.According to the analysis, the UPI’s share of the country’s digital payments has increased from 34% in 2019 to an outstanding 83% in 2024, with a spectacular CAGR (cumulative average growth rate) of 74% over the last five years.
At the macro level, the volume of UPI transactions grew from 375 crore in 2018 to 17,221 crore in 2024, while the total value of transactions went from Rs 5.86 lakh crore in 2018 to Rs 246.83 lakh crore in 2024.