UPI123 Pay to help achieve 100 bn monthly transactions, says RBI official

As of August 31, the number of monthly transactions stood at 10.58 billion, with a transaction value of Rs 15.76 lakh crore.

UPI123 Pay, National Payments Corporation of India's (NPCI) instant payment system for feature phones, will boost UPI's 100 billion monthly target, said K Vijayakumar, General Manager, Department of Payment and Settlement Systems, the Reserve Bank of India (RBI).

"Payment systems like UPI123 Pay alongside others will facilitate UPI's target to reach 100 billion monthly transactions," Vijayakumar said at the Global Fintech Festival on September 5.

Earlier, NPCI MD and CEO Dilip Asbe had said India might soon touch 100 billion UPI transactions a month now that it has already crossed 10 billion in August 2023.

Asbe said UPI was being used by 350 million people and the firm wants it to be used by every Indian. As of August 31, the number of monthly transactions stood at 10.58 billion, with a transaction value of Rs 15.76 lakh crore. This was slightly higher than the number reported in July, which was 9.96 billion transactions.

Also read: Top 4 UPI players have 95% share in overall transactions

UPI players

The top four UPI (Unified Payments Interface) players which include three fintech payment apps Paytm, PhonePe, Google Pay have captured 95 percent of UPI transactions, according to a report published on September 5 by Bernstein a global wealth management firm.

At the same time, banks have a limited share of transactions in UPI transactions, according to the report titled "India's Promise: The Rise of Digital Credit — the Most Profitable Part of the Financial Inclusion Journey."

The report further added that regulatory restrictions and lack of physical distribution network have limited the impact of this disruption on the bigger prize deposits which remain the stronghold of the banks.

"UPI poses a growth risk for traditional forms of cashless payments such as cards, debit card volumes have been declining steadily in the last 5 years, despite the low penetration vs other markets," said the report.

The report also lauds India's financial inclusion initiatives. "The key 'measurable' aspects on the country's financial inclusion status include (1) access to bank accounts and (2) growth in the number of savings deposit accounts; and few countries match India on the progress it has made on Financial Inclusion, especially on the deposits and payments front," said Bernstein report.