Unified Payments Interface (UPI) is currently the single largest retail payment system in the country in terms of volume of transactions, indicating its wide acceptance. In December 2021, 4.6 billion transactions worth Rs 8.26 trillion were carried out by UPI.
Economic Survey 2021-22, presented by the finance minister today, pointed out that financial transactions have been seeing high growth over the last few years with multiple avenues for making digital payments which are growing over time.
The Digital Payments Index of RBI, which captures the extent of digitization of payments across the country, increased from 100 in March 2018 (base period) to 304.06 in September 2021.
The index captures payment enablers (weight 25%), payment infrastructure – demand-side factors (10%), payment infrastructure – supply-side factors (15%), payment performance (45%), and consumer centricity (5%).
One of the initial objectives of UPI was to replace cash for low-value transactions. As per detailed transaction data of NPCI, 50% of transactions through UPI were below Rs 200. On November 1, 2018, ‘UPI as a payment option in IPO’ was introduced as a new payment channel to the retail investors by SEBI.
Another digital payment solution launched in August 2021, e-RUPI is a person-specific, and purpose-specific digital voucher where it is not required for the customer to have a bank account and is operable on basic phones, even in areas that lack an internet connection. The first use case of e-RUPI was implemented for the Covid-19 vaccination program, which saw more than 2.2 lakh beneficiaries being issued the voucher.