Hitting an all-time high in January, UPI transactions declined both in terms of value and volume in February. As per the data revealed by the National Payments Corporation of India (NPCI), UPI transactions for the second month of 2024 stood at 1,210 crores in volume at the value of ₹18.3 lakh crore. This was a marginal decline from the first month, which stood at ₹18.4 lakh crore.
To know more about the trends in UPI transactions and the factors that led to this minor dip, read on.
The volume of UPI transactions crossed the 1,200-crore mark for the first time in India in October 2023. The volume of transactions rose to 1,220 crores in the first month of this year. However, it fell marginally by 0.8% in February to 1,210 crores, which is still about a 60% rise on a year-on-year basis.
There could be many reasons for the decline in the value and volume of UPI transactions in India. Two of these possible reasons are:
The value and volume of transactions are typically low in February because of fewer days. Hence, experts believe that the number of transactions per day is a better metric to check the growth of UPI transactions. For instance, February saw 417 million UPI transactions per day, which is significantly higher than 393 million transactions a day in January.
Another reason for the dip in total transactions is the technical issues faced by the banks in UPI connectivity in February. Several users complained about such outages on social media platforms. However, as per NPCI, their systems are working fine, and these outages occurred on the institution’s end. The NPCI is working with banks to resolve such issues.
Since 2017-18, these transactions have witnessed a compounded annual growth rate (CAGR) of 168%. As per experts, this growth will be sustained in the future. As the nation inches closer to every Indian using a UPI solution, it has an opportunity for three-fold growth on both the user and merchant side.
Combining this data, estimates suggest that UPI still has a growth potential of up to 10X in India. A ten-fold growth can take the volume of UPI transactions to over the 100-billion mark. With 350 million people using UPI in India, this homegrown payment service has immense potential to scale.
Sharing his outlook, Akshay Mehrotra, Co-Founder and CEO, Fibe said, “UPI stands out as a highly favoured digital payment method for individuals, evident in the consistent rise in both transaction volume and value with each passing month.”
UPI now aims to build cross-border capacities as it has already developed a major digital infrastructure in the country. In fact, RBI has also enabled users to make transactions from pre-sanctioned credit lines through this payment system. What’s more, the NPCI is also gearing up to open more credit lines on UPI.
Currently, RuPay credit card users can link their cards with the UPI interface. This will enable users to enjoy a more seamless and digital payment process. The Fibe Axis Bank Credit Card is one of these UPI-enabled cards, allowing you to make payments without any hassles and earn exciting rewards. Download our Fibe App or register on our website to apply for this credit card.
Download the Fibe app and get instant cash anywhere
