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Unified Payments Interface (UPI) Surges in Popularity, Expanding Services and Penetrating Rural Markets
December 22, 2023
In a recent research paper published in the Reserve Bank of India’s monthly bulletin, the Unified Payments Interface (UPI) has been identified as a key driver of digital transactions, with its popularity soaring across various sectors. The RBI, in its commitment to enhancing the scope of UPI, plans to broaden its application to include medical and educational services.
The surge in UPI transactions is not limited to urban areas, as indicated by a survey conducted by PayNearby, a prominent branchless banking and digital network. The study reveals a remarkable 118% increase in transaction volume and a substantial 106% rise in transaction value in semi-urban and rural regions from January to November this year compared to the same period last year.
November 2023 witnessed an overall robust growth in digital transactions, with e-commerce order volumes soaring by an impressive 37% year-on-year, fueled by festival sales. Remarkably, more than 50% of the total sales for the year occurred through online platforms.
On the retail front, UPI achieved a significant milestone by recording a transaction value of ₹17.4 lakh crore, according to the RBI paper. The PayNearby survey further highlights the adoption of UPI beyond Tier II regions, reflecting its increasing popularity in the country.
Notably, the Reserve Bank has raised transaction limits for various financial services, including AMC, Broking, Mutual Funds, collections, and insurance. Insurance-related transactions, in particular, experienced a substantial surge of 150% in volume and 140% in new customer adoption.
These insights, part of the third edition of the Pan-India report titled ‘Retail-O-Nomics’ released by PayNearby, underscore the pivotal role of UPI and digital retail stores in addressing the evolving landscape of digital transactions and financial services in India.
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