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Current Affairs

UPI transaction value crosses $1 trillion

Date: 04 April 2022 Tags: Monetary Policy & RBI

Issue

Transaction value of $1 trillion has been achieved by the Unified Payments Interface (UPI) for the year 2021-22.

 

Background

This is a major landmark for the payment system, which has gained traction and adoption widely.

 

Details

  • The payment system has also crossed the coveted 5 billion transactions in a month for the first time in March. 

  • UPI has been the major initiator of digital payments revolution in India. The monthly transaction value is close to Rs 9 lakh crore.

 

Growth of UPI

  • About 5.04 billion transactions were processed in March on the UPI platform, witnessing a growth of 7 per cent compared to February.

  • The value and number of transaction showed that popularity of the payments system is going through a positive phase.

  • UPI also has a high share in the volume of total retail payments made in the country. About 60% of retail payments were done using UPI.

  • It is also a preferred choice for low value transactions in the country. About 50% of the transactions on UPI are worth less than Rs 200 each.

 

Future prospects

  • To widen its user base, RBI has announced UPI on feature phones without an Internet connection known as UPI123Pay.

  • For facilitating small-ticket transactions, UPI Lite has been announced by the NPCI.

 

Challenges

  • The platform has been vulnerable to failed transactions due to technical glitches such as unavailability of systems and network issues.

  • It shows a failure rate of 2.5 percent. The UPI system has shown an unscheduled downtime of 187 minutes.

 

Unified Payments Interface (UPI)

UPI is a real-time payment system developed by National Payments Corporation of India (NPCI). It is regulated by RBI.

 

National Payments Corporation of India (NPCI)

The NPCI is the specialised division of Reserve Bank of India created for operating retail payments and settlement systems in India.