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UPI’s path to
10 billion transactions
A primer on UPI in India compiled by IDfy (an
Integrated Identity Platform) with insights from
Kiwi (a UPI-enabled virtual Rupay card provider)
UPI’s journey to 10 billion
In August 2023, UPI hit a record number of 10 billion transactions. This
primer decodes UPI’s journey to this milestone and offers insights into
the payment system’s existing ecosystem.
Growth of UPI

12
(IN 100 CR.)�

10
Exponential growth of UPI
8
post Covid
6
VOLUME

2
- 17

18

18

19

- 19

- 20
6

- 16

- 20

20

- 21

- 22

- 22

- 22

3
- 17

- 17

r -2

y2
r-1

r-
y-

t-

v-
Feb

Jul

pt
g
pt

Ap

Ma
Feb

Jul

c
Jan

Jun
Oc

Ma
Ap

De

Ma

Au

No

De
Se
Se

Months taken for 1 Billion transactions

50
43 UPI is now recognized as the fastest-growing
40 retail payment system in the world
NUMBER OF MONTHS

30

20

12
10
9
5 4 4
3 3 3 3
0
1 2 3 4 5 6 7 8 9 10
Oct-19 Oct-20 Jul-21 Oct-21 Mar-22 Jul-22 Oct-22 Jan-23 May-23 Aug-23

M O N T H LY T R A N S A C T I O N V O L U M E ( I N B I L L I O N ) A N D M O N T H O F A C H I E V E M E N T

10x
monthly transactions in 5 years,
61.03%
annual growth rate,
from Oct 2019 to Aug 2023 from Oct 2019 to Aug 2023

4.05%
monthly growth rate,
340 Mn
Average UPI transactions/day. That’s
from Oct 2019 to Aug 2023 more than the population of the USA

2
Journey of UPI and Policy Initiatives
IN BILLION
Aadhaar UPI for
OTP-Based NRE/NRO
Onboarding Accounts
10 BHIM Apps
Interoperability
ICCW
Streamline QR using UPI
Merchant Infrastructure
Onboarding
8 Guidelines &
SDK -integration
UPI
Numeric UPI
Autopay
UPI ID Lite
Mapper
Launch BBPS
6
of UPI Integration
UPI123Pay
NETC
Integration Volume
QR codes / Linkage
Cap
USSD 2.0 with
PIDF for TPAP
4 Singapore’s
& UDIR
PayNow

UPI 2.0
Bharat QR Rupay
Integration Credit Card
2 Linkage
PPI
Interoperability

International
0 Onboarding Merchant
of RRBs Payments
6

2
-17

-19

21
-17

-18
-15

22

3
19

3
-18

20
0
l-1

l-2

-2

-2
-2

n-
b

ct

n-
ar
c

r-
Ju

pt

c-

b
Ju

g
Fe

Au

ay
De

Ju
O
M

Ja
Ap

Fe

Au
Se

De
M

330 Mn
Registered Users

70 Mn
Merchants

81%
of digital transactions are on UPI

3
Why Indians use UPI
A primary survey was conducted in June 2023 to understand
adoption and user preferences across various payment modes. 511
responses were received from diverse age, education, professional,
and regional groups, and below are the results:
Reasons for using UPI

Ease of use 28.4 44.0 17.4 93.0

Time saving 16.0 28.8 8.8 56.0
Non-availability of cash 14.3 20.2 5.3 41.5 AGE
18 - 25
No cost transactions 11.2 21.1 5.7 40.7 25 - 40
40 - 60
Other 2.0 Above 60

0 20 40 60 80 100
PERCENT

Note: Among UPI users within the sample, shares of respondents in the age groups of 18-25, 25-40, 40-60 and above 60
were 30%, 47%, 19% and 4% respectively.

Year of UPI adoption among respondents

100
New users as per cent
of total users�
13.9 1.1
8.1
80 18.8

60 21.1

40 17.5

20
9.6
9.9

0
2016 2017 2018 2019 2020 2021 2022 2023 Total

Preference over alternate digital payment modes

80
70.5%
70 GENDER
RESPONSE (PERCENT)

60 Male
31.5% Female
50

40

30

20 38.9% 11.9%
10 5.90% 5.50% 3.90%
9.0% 2.30%
0
UPI Credit Card Debit Card NEFT/ RTGS No Digital Mobile wallets/
Mobile Banking Transactions Prepaid Cards

M O S T P R E F E R R E D D I G I TA L P AY M E N T M O D E

4
The latest game-changer:
Rupay credit card on UPI
In October 2022, NPCI launched the “Rupay credit card on UPI”
where users could link their Rupay credit card with their UPI handle
and make UPI payments from their credit card.
In 2023, multiple startups and banks went live with this integration,
paving the way for the next wave of innovation in the country.

Banks live with Rupay credit card on UPI

Fintechs live with Rupay credit card on UPI

Commercial model for transactions

 No MDR charged for “small merchants” for transactions up to Rs. 2,000

For small merchants with transactions above Rs. 2,000 and for all other
 merchants, MDR will be applicable as per the acquiring bank’s agreement

 Interchange of 8 bps paid out to Payer PSP and app each, for retail
merchant category

 Interchange of 4 bps paid out to Payer PSP and app each, on industry
program

5
 Teething issues with Rupay credit cards on UPI

!!! Only 10 banks live with the integration

!!! Merchants reluctant to accept this mode due to MDR on credit cards

Unanswered questions about Rupay credit cards on UPI

With the right marketing, will customers specifically ask for Rupay credit
1
cards?

2 Will this feature further increase UPI payments?

How long will it take for merchants to comfortably accept UPI

3
payments on credit cards?

How will larger card networks like Visa and Mastercard compete with
4
this feature?

Demand in terms of numbers and spends, both, is going to grow, especially with CC on
UPI coming into foray. However, it’s primarily going to be multi-carding driven. Existing
card customers are going to ask for Rupay cards considering the convenience. However,
industry-level unique customers may not see growth, especially in the near term.
Mohit Bedi, Founder

Impact of the integration on the credit card industry

37% increase in demand for Rupay cards was observed in the Jul-Sep ‘23 quarter,
as per a study by Zet. What is unclear though, is whether these are new customers
or existing cardholders asking for Rupay cards

The Rupay UPI integration, along with the RBI guideline allowing consumers to
choose their preferred card network, can in turn lead to an increase in volume for
Rupay credit cards issued

6
What next?
The future of UPI in India

More value-added services expected with Rupay credit cards

on UPI, such as EMI conversion, Limits management, Spend
analysis etc.

UPI Lite is expected to revolutionize payments in rural India

with limited network connectivity

NPCI’s plug-in which allows UPI payments to be embedded

within the app - bypassing the need to redirect to a third-party app
like BHIM, Google Pay or Phone Pe to enter UPI pin - will make
the experience more seamless, at the same time ensuring that
merchants are not tied to payment aggregators

Global integrations currently in place with 5 countries - Singapore,

Bhutan, Nepal, UAE - with more countries expected to be added
to the list

Conversational payments, where users speak to an AI bot on

their smartphone to make payments - is now a possibility