Unified Payments Interface or the UPI service is the single largest retail payment system in the country in terms of volume of transactions, according to the Economic Survey tabled in Parliament ahead of Union Budget 2022.
In December 2021, 4.6 billion (460 crore) transactions worth Rs 8.26 lakh crore were carried out by UPI, which is developed by the National Payments Corporation of India (NPCI).
Following demonetisation of Rs 500 and Rs 1000 currency notes and more recently the Covid-19 pandemic, as contactless payments were encouraged, the digital payments, now dominated by the UPI, have witnessed a massive boom, however, cash in circulation continues to be on the rise albeit at a slower pace.
"One of the initial objectives of UPI was to replace cash for low-value transactions," the Economic Survey noted. According to NPCI data, 50 per cent of transactions through UPI were below Rs 200.
In April-November 2021, UPI processed more than 24.26 million One Time Mandate create transaction of Rs 44,381 crore. The transaction limit for transactions was increased from Rs 1 lakh to Rs 2 lakh in March 2020 and was further increased to Rs 5 lakh in December 2021, the Survey noted.
The UPI system is part of the Narendra Modi government's flagship Digital India agenda and a persistent push for the cashless economy. However, cash is far from extinct in India and with the rise of notes in circulation, the nation has a long road ahead for being truly cashless, experts have noted.
In September last year, Singapore's central bank said the city-state and India have agreed to integrate PayNow and UPI for instant and low-cost transactions between the two countries. Besides, Bhutan became the first country to adopt BHIM-UPI standards for QR-based transactions. Finance Minister Nirmala Sitharaman, at the time of its launch, had said the move will further strengthen the cooperation between the two neighbouring nations
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