How three-way payments work in India - UPI: Transactions to cross $1 trillion by 2021-22

　　India's UPI: Transactions to cross $1 trillion by 2021-22

　　The Unified Payment System of India (UPI) has seen a staggering $1 trillion worth of transactions in the financial year 2021-22. Here is a detailed analysis of the UPI transaction value breakthrough:

　　I. The skyrocketing volume of UPI transactions

　　In March 2022, UPI crossed 5 billion transactions in a single month for the first time, signalling the remarkable growth of the payment system over the past few years. Benefiting from the popularity of digital apps in India during the New Crown Virus pandemic, UPI's monthly transaction volume has approached Rs 9 billion.

　　II. Interpretation of UPI transaction data

　　According to the National Payments Corporation of India (NPCI), the UPI platform processed 5.04 billion transactions for an amount of Rs 8.8 lakh crore as of 29 March 2022, a growth of more than 71 TP3T year-on-year. In FY 2021-22, UPI processed more than 45 billion transactions for an amount of over Rs 8.3 lakh crore, almost double the 22 billion transactions and Rs 41.03 billion amount in FY 2020-21.

　　III. UPI's place in digital payments

　　UPI has played a key role in driving the penetration of digital payments in India. The Reserve Bank of India's (RBI) Digital Payments Index (DPI) reached 304.06 in September 2021 as compared to 270.59 in March 2021.A report by Macquarie Securities shows that in FY 2021-22, around 601 TP3T of retail payments in India were done through UPI.

　　IV. Next steps for UPI

　　UPI is expected to process 1 billion transactions per day in the next 3-5 years. To achieve this, NPCI has launched UPI Autopay and plans to use UPI on feature phones to expand digital financial inclusion.

　　V. Challenges facing UPI

　　Despite the significant increase in UPI transaction volumes, the issue of technical glitches and transaction failures persists.In February 2022, State Bank of India saw 31.68 million UPI transactions fail due to technical reasons out of 1.24 billion UPI transactions processed, a failure rate of more than 2.51 TP3T.

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