UPI Surges Ahead, Leaving NEFT and Debit Cards in the Dust

In a remarkable turn of events, the Unified Payments Interface (UPI) has outshone its counterparts, the National Electronic Fund Transfer (NEFT) platform and debit cards, marking a significant shift in India’s payment landscape. Recent data from the Reserve Bank of India reveals that UPI transactions experienced an impressive 46% year-on-year growth in November, overshadowing NEFT’s more modest 17.5% increase and dealing a blow to debit cards, which saw a 6.6% year-on-year contraction in October.

Notably, UPI transactions accounted for a staggering Rs 17 lakh in settlements during November, highlighting its dominant position. This success story extends beyond urban areas, as UPI gains traction in semi-urban and rural regions. According to a report by PayNearby, UPI transactions witnessed remarkable increases of 118% in volume and 106% in value in semi-urban and rural stores.

Market players suggest that UPI is not only becoming the preferred choice for individual retail transactions but is also making headway in e-commerce, gradually replacing older platforms like NEFT and debit cards. Ketan Patel, Co-Founder & CEO of Mswipe Technologies, a Mumbai-based digital payment solution provider, envisions UPI as the universal choice for business-to-consumer (B2C) and consumer-to-consumer (C2C) transactions, with seamless integration for smaller business-to-business (B2B) dealings.

As the digital payment landscape evolves, experts foresee a continued dominance of UPI and NEFT, signaling a sunset for physical debit cards and the ascent of virtual debit cards in the future. The resounding success of UPI not only reflects its efficiency but also underscores its expanding influence across diverse segments of the Indian population.