UPI transactions likely to touch Rs 100 trillion soon: Shaktikanta Das

RBI launches UPI for 400 mn feature phone users to widen digital payment reach

Unified Payments Interface (UPI) — the largest retail payment system in the country — has so far processed transactions of over Rs 76 trillion in the current fiscal year (2021-22, or FY22), compared with Rs 41 trillion worth of transactions in 2020-21 (FY21), and is likely to process transactions of Rs 100 trillion, said Reserve Bank of India (RBI) Governor Shaktikanta Das on Tuesday.

Speaking at the launch of UPI for feature phones, Das said, “India’s digital economy has flourished over the past few years and UPI has played a major role in this process, recording 4.53 billion transactions, worth Rs 8.26 trillion in February.”

“In fact, in FY21, the total value of transactions done on UPI was around Rs 41 trillion. In FY22 so far, the total value of transactions is Rs 76 trillion. We are well on our way to reach, hopefully, a transaction value of Rs 100 trillion on UPI,” he said.

According to the data released by the National Payments Corporation of India (NPCI), the umbrella body for retail digital payments in the country, UPI has processed a little over 40.49 billion transactions as of February. This is almost double the number of transactions (in volume terms) reported in FY21, reflecting increased adoption of digital payments in the country, especially UPI.

Further, with one month left in FY22, UPI has achieved the goal of over 40 billion transactions in FY22 set by NPCI’s chief executive officer (CEO). In the calendar year 2021, UPI had processed more than 38 billion transactions, amounting to Rs 71.59 trillion.

NPCI has set itself a target of 1 billion transactions a day on the UPI platform in the next three to five years. “To achieve this milestone, it is imperative we follow the three-zero approach — zero touch, zero time, and zero cost to the customer,” NPCI CEO Dilip Asbe had said.

The transaction data analysis shows that 50 per cent transactions through UPI were below Rs 200, indicating its success because one of the initial objectives of UPI was to replace cash for low-value transactions.

UPI for feature phones

To further deepen the adoption of digital payments in the country, the RBI launched UPI on feature phones for almost 400 million users. This will ensure further democratisation of UPI in the country and make digital payments more inclusive.

UPI for feature phone users will be known as UPI123Pay and will have almost all the features of UPI that are there on smartphones. It will have multiple digital solutions, such as UPI payment through interactive voice response number, application functionality, missed call-based approach, and proximity sound-based payments.

“The launch of UPI123Pay makes facilities under UPI accessible to that section of society so far excluded from the digital payments landscape,” said Das.

UPI can be used on the feature phones but the process is unstructured supplementary service data (USSD)-based and cumbersome. It is expected that UPI123 Pay will fill in the gap and take the adoption of digital payments and UPI to the next level. In India, there are roughly 1.18 billion mobile phone users, of which 780 million use smartphones, the rest feature phones.

Further, enabling UPI for feature phone users will help NPCI in realising its target of processing 1 billion transactions a day. Also, it will give a boost to the RBI’s objective of achieving a less-cash economy. “There are 400 million feature phone users and for them the choices are substantially limited. Given that this fivefold increase in transactions is contributed substantially by UPI, it is important if we have to go to the next stage of development,” said RBI Deputy Governor Rabi Sankar.

Feature phone users will now be able to perform various financial and non-financial transactions, such as peer-to-peer payments, utility bill payments, national electronic toll collection (NETC) FASTag recharge, mobile bills, direct-to-home, and mobile recharge, along with linking a bank account.

The RBI also launched DigiSaathi — a round-the-clock helpline set up by NPCI — that will assist callers with all their queries on digital payments via website and chatbot facility. DigiSaathi’s automated response system will help customers in addressing their queries related to multiple products and services under the payment system umbrella, including cards, UPI, national electronic funds transfer, real-time gross settlement, immediate payment service, Aadhaar-enabled payment system, NETC, Bharat Bill Payment System, USSD, prepaid payment instrument wallets, national automated clearing house, trade receivables discounting system, cheque truncation system, money transfer service scheme, mobile and internet banking.