India’s Unified Payments Interface (UPI) has reached another historic milestone by crossing 20 billion transactions in a single month for the very first time. According to data from the National Payments Corporation of India (NPCI), UPI processed 20.01 billion transactions in August. That marks a 34 percent increase compared to the same month last year and a 2.8 percent rise from July’s 19.47 billion transactions.
The total value of transactions stood at ₹24.85 lakh crore. While this reflects a strong 21 percent year-on-year growth, it was slightly lower than July’s ₹25.08 lakh crore. Still, the steady rise in usage highlights how UPI continues to gain acceptance across the country, from metro cities to small towns and villages.
Key Takeaways
- UPI processed 20.01 billion transactions in August, crossing the 20 billion marks for the first time.
- Transaction volume increased by 34 percent compared to August last year.
- The total value of transactions was ₹24.85 lakh crore, up 21 percent year-on-year.
- The daily average stood at 645 million transactions.
- UPI now contributes to more than 85 percent of all digital transactions in India.
The Rise of UPI
Since its launch in 2016 by NPCI, UPI has quickly become the primary method for digital payments in India. Its ease of use allows users to link multiple bank accounts to a single mobile app, making money transfers simple and secure. Payments are routed through a Virtual Payment Address (VPA), such as name@bank, which avoids the need to share sensitive banking details for every transaction.
Growth is also being driven by person-to-merchant (P2M) transactions. From local vendors using QR codes to large businesses, UPI has become a widely accepted mode of payment. For millions of Indians, it has become part of their daily financial routine.
UPI’s reach has also extended beyond India. It is now available in seven countries, including the UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, and Mauritius. This expansion makes it easier for Indians abroad to use UPI for payments. The recent rollout in France marks an important step in bringing UPI to European markets.
How UPI Works
UPI is built on the principle of instant money transfers between bank accounts. When a payment is made, the UPI app sends a request to the user’s bank. The bank verifies and transfers the funds to the recipient’s account in real-time. Transactions are secured through a UPI PIN, a unique 4-to-6-digit code that must be entered for every payment. This ensures only the account holder can authorize transfers.
The rapid adoption of UPI shows the strength of India’s digital payment ecosystem. It has expanded access to financial services for millions who were previously outside the formal banking system. This milestone not only reflects India’s steady move toward a cashless economy but also reinforces its position as a global leader in real-time payments.
Related FAQs
Q1: What is UPI and who developed it?
A1: UPI, or Unified Payments Interface, is an instant payment system that allows you to send and receive money between bank accounts using a mobile app. It was developed by the National Payments Corporation of India (NPCI) in 2016.
Q2: How is UPI different from IMPS or NEFT?
A2: UPI is a system built on the IMPS infrastructure, offering instant, 24/7 transfers like IMPS. However, UPI simplifies the process by using a Virtual Payment Address (VPA) instead of bank account numbers and IFSC codes. This makes it easier to use for both person-to-person and merchant payments.
Q3: Is there a daily limit on UPI transactions?
A3: Yes, the general limit for a single UPI transaction is ₹1 lakh. However, for some specific categories like capital markets, collections, and foreign remittances, the limit can be higher, up to ₹5 lakh. Some banks or apps may set their own lower limits.
Q4: Do I need a smartphone to use UPI?
A4: While UPI is mostly used on smartphones, you can also use it on feature phones through the USSD service, by dialing *99#. This service is available on phones without an internet connection and is known as UPI 123Pay.
