Despite concerns that a lack of awareness might hinder adoption, UPI’s necessity has pushed millions into the formal banking system, making it the world’s largest real-time payments network.
“UPI can serve as a cost-effective solution for financial inclusion on a large scale. The widespread adoption of UPI proves that a lack of financial literacy did not hinder its success; rather, the necessity to utilise UPI encouraged the informal economy to open bank accounts,” the Economic Survey noted.
In 2024, UPI processed 172 billion transactions worth over ₹245 lakh crore, accounting for 83% of all digital payments, a notable rise from 34% five years ago.
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The system now handles over 16 billion transactions every month, with a total of 63 crore UPI addresses and an estimated 40 crore unique users.
The Economic Survey suggests UPI’s success can serve as a model for other financial inclusion initiatives.
“A fundamental step in integrating a significant portion of the informal sector into the pension framework is raising awareness about pension and financial literacy and utilising modern, application-based interfaces that allow seamless access to these services,” the report stated.
New players enter UPI space
UPI’s growth has been driven by mobile apps such as PhonePe, Google Pay, Paytm, Cred, and Amazon Pay. In 2024 alone, 20 companies secured third-party application provider (TPAP) approval from the National Payments Corporation of India (NPCI), bringing the total number of approved firms to 40 since 2016.
The NPCI has actively pushed for a broader distribution of market share, aiming to reduce reliance on PhonePe and Google Pay, which currently control around 85% of UPI transactions.
First Published: Jan 31, 2025 4:44 PM IST