UPI Transactions Hit Record High in May, Boosting India's Digital Payment Landscape

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UPI Transactions Hit Record High in May, Boosting India's Digital Payment Landscape

Team FS

03/Jun/2024

Key Points:

UPI transactions in May 2024 reached a record 14.04 billion, valued at $246.15 billion, marking significant growth.
IMPS transactions saw a marginal increase, with volume rising by 1.45% and value by 2.36% in May 2024.
FASTag transactions grew by 6% in volume and 9% in value, while AePS transactions declined in both volume and value.

India's digital payment ecosystem continues to expand at an unprecedented pace, as evidenced by the latest data from the National Payments Corporation of India (NPCI). Unified Payment Interface (UPI) transactions reached a record high in May 2024, processing an impressive 14.04 billion transactions worth US$ 246.15 billion (Rs. 20.45 trillion). This marks a 6% increase in transaction volume compared to April's 13.30 billion transactions and a 4% rise in transaction value from US$ 236.40 billion (Rs. 19.64 trillion) in April.

Year-on-Year Growth

The year-on-year growth figures further highlight the rapid adoption and expansion of UPI. Compared to May 2023, the transaction volume in May 2024 is 49% higher, while the transaction value has increased by 39%. These figures represent the highest transaction volume and value since UPI was launched in April 2016, demonstrating the platform's critical role in India's digital payment landscape.

Immediate Payment Service (IMPS) Performance

The Immediate Payment Service (IMPS) also showed positive growth, albeit at a more modest rate. In May 2024, the transaction volume rose by 1.45%, reaching 558 million transactions, up from 550 million in April. In terms of value, IMPS transactions increased by 2.36%, amounting to US$ 72.94 billion (Rs. 6.06 trillion), compared to US$ 71.26 billion (Rs. 5.92 trillion) in April. When compared to May 2023, IMPS saw a 12% increase in volume and a 15% rise in value, underscoring its steady growth and reliability as a payment method.

FASTag Transaction Growth

FASTag transactions, which facilitate electronic toll payments, saw significant growth in May 2024. The transaction volume increased by 6%, reaching 347 million compared to 328 million in April. The transaction value also saw a notable rise, increasing by 4% to US$ 0.71 billion (Rs. 5,908 crore) from US$ 0.67 billion (Rs. 5,592 crore) in April. Compared to May 2023, this represents a 9% increase in value, reflecting the growing adoption of FASTag for seamless toll payments.

Aadhaar Enabled Payment System (AePS) Decline

In contrast to the growth seen in UPI, IMPS, and FASTag transactions, the Aadhaar Enabled Payment System (AePS) experienced a decline in May 2024. The transaction volume decreased by 4% to 90 million, down from 95 million in April. Similarly, the transaction value dropped by 7% to US$ 2.82 billion (Rs. 23,417 crore) from US$ 3.03 billion (Rs. 25,172 crore) in April. This decline may be attributed to shifting user preferences and the increasing dominance of other digital payment methods.

Implications for Digital Payments in India

The substantial growth in UPI, IMPS, and FASTag transactions highlights the ongoing expansion and adoption of digital payment systems in India. UPI, in particular, continues to lead the charge, with its user-friendly interface, widespread acceptance, and robust infrastructure. The consistent growth in IMPS and FASTag transactions further underscores the reliability and convenience of these payment methods.

The decline in AePS transactions, however, suggests a need to revisit and potentially revamp this system to ensure it meets the evolving needs of users, especially in rural and semi-urban areas where AePS is more prevalent.

Conclusion

The record-breaking UPI transaction figures for May 2024, coupled with the steady growth in IMPS and FASTag, paint a promising picture for India's digital payment future. As the nation moves towards a more cashless economy, the focus will likely remain on enhancing the robustness, security, and user experience of digital payment platforms. The decline in AePS transactions highlights areas for potential improvement, ensuring that all segments of the population can benefit from the digital payment revolution.

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Services

UPI Transactions Hit Record High in May, Boosting India's Digital Payment Landscape

Year-on-Year Growth

Immediate Payment Service (IMPS) Performance

FASTag Transaction Growth

Aadhaar Enabled Payment System (AePS) Decline

Implications for Digital Payments in India

Conclusion

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