UPI crosses 700 million daily transactions,doubles within two years

Unified Payments Interface (UPI) crossed a major benchmark by recording over 700 million transactions in a single day for the first time on August 2, indicating continued strong adoption of digital payments in India. With the government targeting one billion (100 crore) transactions a day, UPI now appears poised to achieve that ambitious goal as early as next year if the current trajectory is maintained.
Although growth has moderated compared to the early years of the platform, daily transaction volumes have doubled over the past two years. In August 2023, UPI was handling around 350 million payments a day; by August 2024, that figure had jumped to over 700 million. The rapid scale-up of UPI usage has been fueled by rising internet penetration and wider acceptance of QR-based merchant payments.
For UPI to reach the next phase of growth and hit the one-billion-transactions-a-day mark, “the ecosystem partners should have a viable business model including merchant discount rate (MDR) on merchant payments,” said a senior banker working on the UPI platform. Industry players estimate that the ecosystem requires around Rs15,000 crore annually to fund new technology investments to support this scale.
Over the past year, fintech companies and payment industry associations have repeatedly urged the government to allow the levy of a small MDR on transactions from large merchants and high-value payments. While the government slashed UPI subsidies from Rs4,500 crore in FY24 to Rs1,500 crore in FY25, it has so far resisted calls to permit MDR, despite the Reserve Bank of India (RBI) recently voicing support for the proposal. A lack of monetisation and declining subsidies is believed to have pushed ICICI Bank to begin charging payment aggregators for routing UPI transactions.
Despite policy roadblocks, organic growth remains robust. UPI processed 19.5 billion transactions worth over Rs25 lakh crore in July 2024 — an average of about 650 million transactions per day valued at roughly Rs83,000 crore. Barring two days, daily volumes remained above 600 million throughout the month. The platform, operated by the National Payments Corporation of India (NPCI), typically sees higher volumes in the first week of each month before transactions taper in the middle.
UPI, which accounts for nearly 85 per cent of all retail digital payments in the country, continues to expand at a monthly growth rate of 5–7 per cent and around 40 per cent annually. Of the 19 billion monthly transactions, almost two-thirds are merchant payments — a dramatic shift from January 2022 when merchant transactions accounted for only 40 per cent of UPI volumes.
Industry experts say UPI is now on the verge of surpassing Visa’s daily transaction volumes, which would make it the world’s largest retail interbank payment platform. Unlike card networks such as Visa and Mastercard that settle transactions in batches, UPI offers real-time interbank settlement, enhancing convenience for users and merchants alike.

(Business Correspondent)