The contribution of Unified Payments Interface (UPI) to the cumulative digital payments pie more than doubled in five years from 34 per cent in 2019 to 83 per cent in 2024, according to data from the Reserve Bank of India’s payment system report.
The share of other digital payment methods such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS), credit and debit cards declined from 66 per cent in 2019 to 17 per cent at the end of 2024.In 2024 alone, India recorded over 208.5 billion digital payment transactions.Higher contribution from India’s real-time payments system UPI comes on the back of growing adoption of digital payment methods.
Between 2019 and 2024, the volume of UPI P2M (person-to-merchant) payments grew faster than UPI P2P (person-to-person) transactions.
UPI P2M grew at a compounded annual growth rate (CAGR) of 99 per cent where the transaction value was less than Rs 500 in the five-year period.
In contrast, UPI P2P (person-to-person) grew at a CAGR of 56 per cent during the same period.
For higher ticket sized transactions, which includes those over Rs 2,000, UPI P2M have grown at a CAGR of 109 per cent during the same five-year period. UPI P2P has grown at a CAGR of 57 per cent.The National Payments Corporation of India’s (NPCI) low value transaction payment method UPI Lite recorded 2.04 million transactions every day valued at Rs 20.02 crore (Rs 200.2 million) in December last year.There has been a 13 per cent year-on-year increase in the average ticket size of a transaction on UPI Lite. It is up from Rs 87 in December 2023 to Rs 98 in December 2024.
“When Paytm and PhonePe introduced UPI Lite on February 15, 2023 and May 02, 2023, respectively, a sustained increase in the UPI Lite payments volume and value was observed,” the RBI said in its report.
Prepaid payment instruments (PPIs), which includes digital wallets, declined 12.3 per cent to 3.45 billion in volumes in the second half of calendar year 2024 (H2 CY24) as compared to 3.93 billion in H2 CY23.During the same period, the value of transactions processed using PPIs declined 25 per cent from Rs 1.43 trillion in H2 CY23 to Rs 1.08 trillion in H2 CY24.