• India's digital economy saw a record 16.58 billion UPI transactions in October 2024.
• The daily UPI transactions crossed 535 million in volume and Rs 75,801 crore in value.
• Digital transactions have surged in India, with cash usage rapidly declining.
• The surge in UPI transactions reflects the growing preference for digital payments over cash.

India's digital economy has witnessed a significant milestone with the Unified Payments Interface (UPI) setting a new record. In October 2024, the country saw 16.58 billion UPI transactions worth Rs 23.5 lakh crore. This is the highest number since the UPI became operational in April 2016. The data, shared by the National Payments Corporation of India (NPCI), indicates a 10% increase in volume and a 14% rise in value compared to September 2024.

The daily UPI transactions in October crossed 535 million in volume and Rs 75,801 crore in value, a significant increase from 501 million in volume and Rs 68,800 crore in September. The Immediate Payment Service (IMPS) transactions also saw a surge, with 467 million transactions in October, up 9% from 430 million in September. In value terms, IMPS transactions grew by 11% to Rs 6.29 lakh crore compared to Rs 5.65 lakh crore in September.

The digital payment ecosystem also witnessed an increase in the number of FASTag transactions by 8% in October to 345 million, compared to 318 million in September. Transactions worth Rs 6,115 crore were made in October, up from Rs 5,620 crore in September.

Digital Transactions Outpace Cash Usage

The Aadhaar Enabled Payment System (AePS) also saw a significant rise in transactions, with 126 million transactions in October, up 26% from 100 million in September. A recent paper by economist Pradip Bhuyan from the Reserve Bank's Department of Currency Management suggests that digital transactions have surged in India to such an extent that cash usage, which still accounts for 60% of consumer expenditure as of March 2024, is rapidly declining.

The share of digital payments more than doubled from 14-19% in March 2021 to 40-48% in March 2024, with UPI playing a key role. The UPI-based transaction volume surged 52% to 78.97 billion in the first half of 2024, from 51.9 billion in the same period last year. Similarly, the value of transactions grew by 40%, increasing from Rs 83.16 lakh crore to Rs 116.63 lakh crore in the first six months of this year.

This surge in digital transactions is not an isolated event but part of a broader trend in India's digital economy. In the past, similar surges have been observed. For instance, in December 2020, UPI transactions scaled past the Rs 4-lakh-crore milestone, with a volume increase of 70% from the previous year.

Digital Payment Platforms and International Partnerships

The growth of UPI transactions is also reflected in the market shares of various digital payment platforms. Google Pay, for instance, retained a 35% market share in volume terms and 38% in values in 2021. Paytm Payments Bank, despite its focus on its wallet business, remained the third-largest in the UPI space.

The rise in digital transactions has also been facilitated by international partnerships. The NPCI International Payments Limited (NIPL), a subsidiary of NPCI, has been forging partnerships with different countries to build a huge acceptance network for RuPay and UPI. This has allowed Indian travelers to make payments via these channels in their destination country of travel.