The Union Finance Ministry, in response to Lok Sabha, highlighted the exceptional growth of Unified Payments Interface (UPI) transactions, reporting that a staggering volume of UPI transactions has experienced a compound annual growth rate (CAGR) of 147%, jumping from ₹92 crore in FY 2017-18 to ₹8,375 crore in FY 2022-23.
Simultaneously, the value of UPI transactions surged from ₹1 lakh crores to ₹139 lakh crores during the same period, reflecting a substantial 168% CAGR.
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The ongoing fiscal year, until December 11, witnessed a further boost in UPI transactions, reaching 8,572 crore. This emphasizes that UPI transactions will constitute 62% of all digital transactions in FY 2022–23. The Finance Ministry’s statement also noted a decline in the year-on-year growth of banknotes in circulation, dropping from 9.9% in FY 2021–22 to 7.8% in FY 2022–23, attributed to UPI’s widespread adoption.
Initiated in 2016 by the National Payments Corporation of India (NPCI), UPI operates as an instant payment system regulated by the Reserve Bank of India (RBI). It enables swift fund transfers between any two bank accounts, leveraging the immediate payment service infrastructure.
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A recent development by the RBI involved approving the integration of RuPay credit cards with UPI. This innovation eliminates the necessity for physical credit cards at merchant outlets equipped with UPI QR codes, enabling customers to seamlessly use RuPay credit cards. This advancement opens avenues for utilizing credit cards, even at small merchant establishments, significantly enhancing convenience.
The exponential growth of UPI transactions showcases a monumental shift towards digital payments in India. With its continued innovation and integration with other payment methods like RuPay credit cards, UPI remains at the forefront, transforming India’s financial landscape.
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