RBI Bulletin: UPI was most favoured mode of payment systems in July 2023

UPI

Unified Payments Interface (UPI) stood as the most favoured mode of payment system and comprised 57 percent of the total online purchases among the various payments in July 2023, according to the Reserve Bank of India Bulletin.

UPI was followed by credit cards, which comprised 31 percent of the payments and other payment options such as wallets, net banking and debit cards (12 percent).

"Digital transactions sustained expansion (YoY) across major payment modes in July and August 2023," said the bulletin.

India’s Unified Payments Interface (UPI) will be key to accelerating the journey as the largest knowledge economy in the world with crucial support from the Reserve Bank of India (RBI) and the government ecosystem, NPCI CEO said.

“UPI has 10X growth possible still from the very current base. The RBI, government and the ecosystem’s role will be super crucial to make it a reality. I believe UPI will be one of the key tools that shall accelerate India's journey to one of the best and largest knowledge economies in the world,” National Payments Corporation of India (NPCI) CEO Dilip Asbe told Moneycontrol.

UPI has not only revolutionised and digitised India’s payments space, but it has also created an ecosystem of fintech players to offer products on top of the platform and created multi-billion-dollar private enterprises.

In July, the number of UPI transactions almost hit the 10 billion mark (9.96 billion to be precise), and the value of those transactions crossed Rs 15 lakh crore. This is more than 10 times what credit cards achieved in over 30 years.

The NPCI, which runs UPI, is now targeting one billion transactions a day, which is three times of what it is now. However, that milestone seems to be a couple of years away at the current annual growth rate of over 40 percent.

The Reserve Bank of India (RBI) on August 10 said that it will consider conversational payments on UPI through artificial intelligence (AI).

“Conversational payments on UPI will enable users to engage in conversation with AI systems to make payments,” RBI Governor Das said at the August 10 MPC deliberations.

The central bank has proposed this measure with the objective to harvest new technology enhancements for users, he added.