Context: Rapid Growth in Digital Payments:
- Digital payments in India have surged dramatically, growing more than 3.5 times in value from ₹772 lakh crore (2013) to ₹2,758 lakh crore (2024).
- The volume of digital payments has increased even more significantly, from 222 crore in 2013 to over 20,787 crore in 2024.
- Between 2019 and 2024, digital payments grew by 1.6 times in value and 6.7 times in volume, as per the Reserve Bank of India (RBI) Payment System Report.
Relevance : GS 3(Economy , Banking)
UPI Dominance in Digital Payments:
- The Unified Payments Interface (UPI) has emerged as the key driver of this growth, consolidating multiple bank accounts into a single mobile interface for seamless transactions.
- UPI’s volume share in the digital payments landscape surged from 34% in 2019 to 83% in 2024, illustrating its growing prominence.
Impressive Growth in UPI Transactions:
- UPI transaction volumes increased by an astonishing 46 times from 375 crore in 2018 to 17,221 crore in 2024.
- In contrast, other payment methods only saw a doubling of transaction volumes during this period, indicating the outsized role of UPI in the growth of digital payments.
Surge in UPI Transaction Values:
- UPI transaction values surged from ₹18.37 lakh crore in 2019 to ₹246.83 lakh crore in 2024, reflecting the increased adoption and value of UPI-based transactions.
Person-to-Person (P2P) vs. Person-to-Merchant (P2M) Transactions:
- UPI transactions in the P2M category (business payments) grew faster than P2P (personal transfers) transactions in terms of volume.
- This shift towards P2M transactions highlights the growing role of UPI in facilitating business payments, particularly in the retail and services sectors.
Comparative Share of Digital Payment Methods in 2024:
- In terms of transaction volume, UPI dominates, accounting for over 80% of all digital payments.
- However, when it comes to transaction value, UPI’s share is lower, constituting about 30%, suggesting that larger value transactions still rely on other payment methods.
Key Data Points and Insights:
- UPI Growth in Volume (2019-2024): From 1,078.75 crore in 2019 to 17,220.80 crore in 2024.
- UPI Growth in Value (2019-2024): From ₹18.37 lakh crore in 2019 to ₹246.83 lakh crore in 2024.
- Other Payment Methods: While other digital payment methods like IMPS, credit/debit cards, and mobile wallets have grown, UPI continues to outpace them, both in volume and overall adoption.
Conclusion:
- The rise of UPI has been a pivotal factor in India’s digital payment revolution, reshaping the landscape by providing a simple, cost-effective, and secure way for users to transfer funds across multiple platforms.
