The Unified Payments Interface (UPI) achieved a record high of 456 crores transactions in December 2021. It surpassed October’s high of 421 crore. The total value of transactions in December was a new record at Rs 8.27 lakh crore.
Bankers attribute the surge in transactions to increasing adoption and a rise in economic activity in the month of December. There had been a significant drop in the year due to the second wave of COVID-19 infections.
The October month was driven by festival season purchases and online sales by e-commerce companies – thus, a record high UPI transactions. The month of November witnessed a marginal dip. December marked a 9% in the number of transactions and a 7.6% increase in value.
The use of UPI in December 2021 has doubled, both in value and volume, compared to transactions in December 2020. Moreover, there were 3800 crore UPI transactions amounting to Rs 73 lakh crore in the calendar year 2021. The National Payments Corporation of India expects the volume to hit one billion a day when the RBI operationalizes the use of UPI wallet for low-value offline transactions. This will enable payments to be made without putting pressure on the core banking system of banks.
It should be noted that UPI transactions were already the predominant mode of electronic payments in India. It is now outdoing the number of card transactions by nearly eight times. And unlike credit cards, the UPI numbers reflect both the increase in peer-to-peer transfers as well as merchant payments.
Bankers say that as UPI is an account-to-account transfer mechanism, they will have to relook their core banking architecture to handle such large volume of transactions on a daily basis.