This surge represents an impressive cumulative annual growth rate (CAGR) of 74% over the past five years, according to the Reserve Bank of India's (RBI) latest payment system report. UPI's dominance has significantly outpaced other digital payment methods, such as RTGS, NEFT, IMPS, credit cards, and debit cards, whose combined share in digital payments has plummeted from 66% to 17% over the same period.
- UPI's share of India’s digital payments has surged from 34% in 2019 to 83% in 2024, with a CAGR of 74% over five years.
- The volume of UPI transactions has skyrocketed, increasing from 375 crore in 2018 to 17,221 crore in 2024, while the value of transactions reached ₹246.83 lakh crore.
- UPI Lite, introduced in 2023, has boosted low-value transaction volumes, contributing to the continued expansion of digital payments in India.
UPI’s explosive growth is attributed to its ease of use, reliability, and secure, real-time transaction capabilities, which have made it the preferred method for digital payments in India. As a result, UPI has played a pivotal role in driving the expansion of digital payment adoption across the country, with the volume of transactions increasing from 375 crore in 2018 to an impressive 17,221 crore in 2024. The total value of UPI transactions also saw a dramatic rise, reaching ₹246.83 lakh crore in 2024, up from ₹5.86 lakh crore in 2018. This equates to a CAGR of 89.3% in terms of transaction volume and 86.5% in transaction value.
The success of UPI has been driven by both person-to-person (P2P) and person-to-merchant (P2M) transactions, with UPI making it easier for individuals and businesses to complete financial transactions. Since 2023, P2M transactions have surpassed P2P in volume, although P2P transactions still hold a higher value. Over the last five years, UPI P2M transactions under ₹500 grew at a CAGR of 99%, while UPI P2P transactions grew at a CAGR of 56%. For transactions above ₹2,000, P2M grew at an impressive CAGR of 109%, while P2P growth slowed to 57%.
In addition to standard UPI transactions, the introduction of UPI Lite has further contributed to the rise of digital payments in India. UPI Lite, a low-value transaction method launched by Paytm and PhonePe in 2023, has seen significant growth, reaching 2.04 million transactions daily, valued at ₹20.02 crore by December 2024. This reflects the continued expansion of UPI and its growing role in India’s payment ecosystem.
