India’s digital payments ecosystem continues to thrive as Unified Payments Interface (UPI) transactions hit a record 19.78 billion in March 2024, with a total transaction value of ₹24.77 lakh crore (US$ 289.26 billion), according to the National Payments Corporation of India (NPCI).
This marks a 14% rise in transaction volume and a 13% increase in value compared to February, largely driven by year-end financial settlements and a growing preference for digital payments.
FY25 Sees 30% Growth in UPI Transaction Value
For FY25, UPI transactions surged by 30% in value, totaling ₹260.56 lakh crore (US$ 3.04 trillion), compared to ₹199.96 lakh crore (US$ 2.33 trillion) in FY24. The total number of transactions also grew 42% year-on-year, reaching 185.85 billion compared to 131.14 billion in FY24.
These figures highlight the growing role of UPI in India’s digital economy, solidifying its position as the preferred mode of transaction for businesses and consumers alike.
Daily Transactions and IMPS Growth Indicate Rising Adoption
The average daily UPI transaction count in March stood at 590 million, up from 575 million in February, reflecting the increased adoption of digital payments for everyday transactions.
Meanwhile, the Immediate Payment Service (IMPS) also saw a 14% jump, with transactions reaching 462 million, and their total value increasing by 19% to ₹6.68 trillion.
FASTag Transactions Decline, Aadhaar Payments Witness Strong Growth
While UPI and IMPS witnessed robust growth, FASTag transactions saw a slight decline of 1.3%, with volumes dropping to 379 million. However, the total transaction value increased by 3% to ₹6,800 crore (US$ 794.11 million), suggesting higher toll rates or increased vehicle movement despite fewer transactions.
On the other hand, Aadhaar Enabled Payment System (AePS) transactions saw a 20% rise in volume, reaching 113 million, while the total transaction value jumped 25% to ₹30,539 crore (US$ 5.37 billion). This growth indicates greater financial inclusion, particularly in rural and semi-urban areas.
What Is Driving UPI’s Growth?
The consistent rise in UPI transactions can be attributed to several key factors:
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Increased merchant acceptance: More businesses, from local vendors to large corporations, are adopting UPI for seamless transactions.
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Government support: Initiatives like UPI Lite, UPI for feature phones, and cross-border UPI payments have boosted adoption.
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Consumer preference for cashless transactions: The ease of using UPI for payments, bill settlements, and e-commerce transactions continues to drive growth.
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Rise of digital financial solutions: The integration of UPI with banking apps, fintech platforms, and online marketplaces has enhanced accessibility.
Future Outlook: UPI’s Role in India’s Digital Economy
Industry experts believe that UPI’s sustained growth is a strong indicator of increasing digital trust and deeper financial inclusion in India. With ongoing advancements such as international UPI adoption, credit on UPI, and AI-driven financial services, the future of digital payments looks promising.
As UPI continues to outpace traditional payment methods, India is set to become a global leader in digital financial transactions, further reinforcing its cashless economy vision.
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