UPI Transactions Dip Slightly In April; International Expansion & Market Share Debates Continue

In April, the Unified Payments Interface (UPI) transactions in India experienced a slight decline, slipping to Rs 19.64 lakh crore from Rs 19.78 lakh crore in March. Similarly, the transaction count decreased from 13.44 billion to 13.30 billion during the same period. Despite this dip, compared to April last year, there was a growth of 50% in transaction numbers and 40% in total transaction value.

The UPI, a payment system, has transformed the domestic payment space and has also made strides internationally. Apart from India, UPI is now functional in several countries including Sri Lanka, Mauritius, France, UAE, Singapore, Bhutan, and Nepal. The National Payments Corporation of India (NPCI) recently made headlines by partnering with the Bank of Namibia to introduce a UPI-like real-time payment system in Namibia. This marks the first-ever collaboration with a central bank to deploy UPI Stack in an international market.

However, amidst these developments, NPCI is under scrutiny regarding its decision to impose a 30% cap on the market share of payment players offering UPI services. Initially proposed in November 2022, this cap aimed to limit the dominance of certain players in the UPI ecosystem. Nevertheless, NPCI is expected to review this decision, especially after the recent meeting with new UPI players in March, where discussions centred on fostering UPI's growth.

Last year, NPCI introduced an interchange fee on prepaid payment instrument (PPI)-based merchant transactions through UPI. Fiscal year 2024 marked a significant milestone for UPI, with transactions surpassing 100 billion for the first time, reaching 131 billion in one fiscal year. This growth trajectory continued into March 2024, with transaction volumes witnessing a 55% increase to 13.44 billion.

Despite the slight decline in April, the overall growth trend remains promising, especially with international expansions and technological advancements. As NPCI reevaluates its market share policies and stakeholders anticipate the future of UPI, both domestically and on the global stage.