In October 2024, the Unified Payments Interface (UPI) achieved a significant milestone, processing 16.58 billion transactions valued at ₹23.5 trillion, marking the highest volume and value since its inception in April 2016. This new record surpasses UPI’s previous peak of 15.04 billion transactions in September 2024 and ₹20.64 trillion in value recorded in July.

Growth Driven by Person-to-Merchant Transactions

The surge in UPI transactions was largely driven by person-to-merchant (P2M) payments, which saw a significant boost during the festival season in October. This marked the first time UPI crossed 16 billion transactions in volume and ₹23 trillion in value, highlighting the growing reliance on UPI for everyday purchases and services.

Compared to September 2024, October saw a 10% increase in volume and a 14% rise in transaction value. Data from the National Payments Corporation of India (NPCI) shows that 14.96 billion UPI transactions amounted to ₹20.61 trillion in August.

Daily Transaction Figures Soar

In October, daily UPI transactions reached a new high, crossing 535 million in volume and ₹75,801 crore in value, compared to 501 million transactions and ₹68,800 crore in September. Year-on-year, UPI transactions grew by 45% in volume and 37% in value.

Other Payment Systems Show Strong Growth

• IMPS (Immediate Payment Service): October saw 467 million IMPS transactions, a 9% increase from September, totaling ₹6.29 trillion—an 11% increase in value from the previous month.
• FASTag: The number of FASTag transactions grew by 8% in October, reaching 345 million transactions, worth ₹6,115 crore, compared to ₹5,620 crore in September.
• Aadhaar Enabled Payment System (AePS): October saw 126 million AePS transactions, a 26% increase from September, with the total value growing 35% to ₹32,493 crore.

Year-on-Year Growth Across Transactions

• IMPS: Volume grew by 5%, while value increased by 17% compared to October 2023.
• FASTag: Volume rose 8% and value by 10% year-on-year.
• AePS: A notable 26% increase in transaction volume and a 25% rise in value compared to October 2023.

The data underscores the growing adoption and trust in digital payment systems, with UPI leading the way in shaping India’s cashless economy.

India is solidifying its position as a global leader in digital payment technologies, with the internationalization of the Unified Payments Interface (UPI) progressing swiftly, according to a report by the Reserve Bank of India (RBI). The UPI achieved a significant milestone in October, recording 16.6 billion transactions in a single month, alongside notable improvements in its performance metrics.

Successful instant debit reversals, for example, increased to 86% in October 2024, up from 77% during the same period last year. Highlighting UPI’s capabilities, RBI Deputy Governor Michael Debabrata Patra noted its ability to integrate multiple bank accounts into a single mobile application, enabling seamless peer-to-peer (P2P) and person-to-merchant (P2M) interbank transactions.

Innovations Driving Digital Financial Growth

Patra highlighted other advancements complementing UPI’s success:

1. Account Aggregators and OCEN: Innovations such as the Account Aggregator framework and the Open Credit Enablement Network (OCEN) are driving productivity gains by streamlining access to digital credit.
2. ONDC Expansion: The Open Network for Digital Commerce (ONDC) now operates in over 720 cities, handling 49.72 million orders as of March 2024.
3. TReDS for MSMEs: The Trade Receivables Discounting System (TReDS) addresses the ₹52.2 trillion credit gap faced by MSMEs, reducing funding costs by up to 2.5 percentage points. The value of invoices financed through TReDS has grown over 23 times since its inception.

Rising Digital Adoption and Embedded Financing

India’s digital revolution is reaching wider demographics:

• Internet Usage: Approximately 40% of the rural population and 78% of people aged 20-30 actively use the internet.
• E-Commerce Growth: Around one-third of households engage in online purchases, with a growing share in categories such as consumer durables and food.

The emergence of embedded financing is reshaping the FinTech landscape. Its share in FinTech funding has grown from 2% in 2020 to 9% in 2024, indicating rising demand for integrated financial solutions.

Digitalisation Index Reflects Economic Transformation

To measure the impact of digitalization, the RBI has developed a Digitalization Index using a dynamic factor model (DFM). The index indicates steady growth, reflecting the ongoing transformation of India’s economy. This digital shift is also influencing monetary policy transmission, creating new research opportunities to understand its broader economic impact.

India’s Unique Position for Digital Leadership

India’s robust digital public infrastructure (DPI), a thriving information technology sector, and a burgeoning youth population—including one of the largest bases of AI talent—position the country to unlock new growth opportunities. According to Patra, these factors equip India to optimise existing resources and spearhead transformative global innovations.

As the UPI continues to gain international traction, India’s digital revolution sets a benchmark for other nations aspiring to leverage technology for economic growth and inclusion.

Paytm has unveiled a new UPI Lite auto top-up feature designed to simplify daily transactions for its users. This innovative service automatically replenishes the UPI Lite balance when it falls below a set threshold, ensuring a seamless experience for payments under ₹500. With this, Paytm continues to enhance its digital payment offerings, catering to the needs of users who rely on UPI for small-value transactions.

How the Feature Works

The UPI Lite auto top-up eliminates the hassle of manually reloading your UPI Lite balance. Users can set a predefined threshold, and when their balance dips below this limit, the system automatically recharges it with a predetermined amount from their linked bank account. This ensures uninterrupted payments without requiring constant monitoring or manual intervention.

Key Highlights of the UPI Lite Auto Top-Up

1. Designed for Small Payments:
   • Ideal for transactions under ₹500, such as groceries, snacks, or travel fares.
   • These payments do not require a PIN, making them faster and more convenient.
2. Hassle-Free Transactions:
   • Automatic top-ups save time and effort, ensuring users always have sufficient balance in their UPI Lite account.
3. Focus on Convenience:
   • Users can avoid delays caused by insufficient balance, especially for high-frequency, low-value transactions.
4. Secure Process:
   • The auto top-up feature operates within the secure framework of UPI Lite, offering a safe and reliable payment experience.

Paytm’s Recent Innovations in UPI

This launch follows Paytm’s introduction of international UPI transactions, enabling users to make payments in six countries, including Singapore, the UAE, and Mauritius. The integration of UPI Lite auto top-up complements this global expansion by strengthening its domestic digital payment ecosystem.

Benefits for Users

1. Seamless Payment Experience:
   • The auto-recharge function removes the inconvenience of running out of balance during crucial transactions.
2. Enhanced User Efficiency:
   • Users can focus on their daily activities without worrying about maintaining their payment balance.
3. No PIN Required for Payments:
   • Transactions under ₹500 made via UPI Lite are PIN-free, speeding up the payment process.
4. Encouraging Digital Adoption:
   • By simplifying small-value payments, Paytm is making digital payments more accessible to all user segments, including first-time adopters.

How to Activate the UPI Lite Auto Top-Up

• Step 1: Open the Paytm app and navigate to the UPI Lite settings.
• Step 2: Set a balance threshold that will trigger the auto top-up.
• Step 3: Specify the amount to be recharged automatically when the balance falls below the threshold.
• Step 4: Link your preferred bank account to enable the automatic recharge feature.

Once activated, the system will handle top-ups in the background, ensuring a consistent and uninterrupted payment experience.

Boosting UPI Adoption in India

The UPI Lite auto top-up feature aligns with India’s vision of increasing digital payment adoption across all demographics. With its focus on small-value transactions, this service aims to cater to millions of users, including those in tier-2 and tier-3 cities where digital payment usage is steadily growing.

As digital transactions become a part of everyday life, Paytm’s latest feature is expected to further strengthen its position as a leader in the UPI ecosystem, offering unparalleled convenience to its users.

RBI Raises UPI 123Pay Transaction Limit to ₹10,000 for Feature Phone Users

The Reserve Bank of India (RBI) has increased the transaction limit for UPI 123Pay from ₹5,000 to ₹10,000, empowering feature phone users to make higher-value digital payments. UPI 123Pay is specifically designed for individuals without internet access on their mobile phones, offering multiple ways to perform digital transactions seamlessly:

How UPI 123Pay Works

1. IVR (Interactive Voice Response): Users can complete transactions through a voice-based system by following simple instructions.
2. Missed Calls: Payments are triggered by dialing specific numbers and hanging up, initiating a secure payment process.
3. OEM (Original Equipment Manufacturer) Apps: Feature phone apps enable users to make transactions without requiring internet connectivity.
4. Sound-Based Technology: Sound waves are used to securely transmit payment information between devices.

Key Changes Introduced

1. Higher Transaction Limit:
   • The maximum transaction limit has been increased to ₹10,000, doubling the previous limit of ₹5,000.
2. Enhanced Security with Aadhaar OTP Authentication:
   • Aadhaar-based OTP authentication will be integrated into UPI 123Pay transactions to provide an additional layer of security.
3. Standardized Transaction Tagging:
   • A new purpose code (86) has been introduced to categorize and track UPI 123Pay transactions more efficiently.
4. Improved Initiation Modes:
   • UPI 123Pay now supports expanded initiation modes, including IVR, missed calls, feature phone apps, and sound-based payments.
5. UPI Number Functionality:
   • The system will enable payments using a unique UPI numeric ID mapper for added convenience.

Implementation Timeline

The National Payments Corporation of India (NPCI), which oversees UPI, has directed banks and service providers to adopt these changes immediately. Full compliance with the new guidelines is expected by January 1, 2025.

What is UPI 123Pay?

UPI 123Pay is a groundbreaking service that makes digital payments accessible to feature phone users who lack internet connectivity. By leveraging simple technologies such as IVR calls, missed calls, and sound-based communication, it bridges the gap between underserved populations and digital financial services.

Benefits of the Updates

1. Increased Convenience:
   • The higher transaction limit will allow users to make more significant payments while staying within the UPI ecosystem.
2. Enhanced Security:
   • Aadhaar OTP authentication strengthens transaction security, ensuring safer digital payments for feature phone users.
3. Streamlined User Experience:
   • Standardized tagging and expanded payment modes simplify the payment process, enhancing usability.

These updates aim to accelerate the adoption of digital payments across India, especially in rural and underserved regions, further contributing to the country’s financial inclusion goals.

Are you someone who relies heavily on Unified Payments Interface (UPI) apps for daily payments? If so, you’re not alone. UPI has revolutionized digital payments in India, making it easy and hassle-free to pay for anything from groceries to utility bills. But what if you could combine the convenience of UPI with the flexibility of a credit card? Enter UPI credit cards, a game-changing solution for modern-day payments.

What Are UPI Credit Cards?

UPI credit cards bring together two popular payment methods: UPI and credit cards. Traditionally, UPI payments were linked directly to your savings account. This meant that you could only pay merchants or vendors if you had sufficient funds in your bank account. With UPI credit cards, however, you can now make payments on credit.

This feature enables users to carry out real-time UPI transactions while charging the amount to their credit card. The money is deducted from the credit card limit rather than your bank account, offering financial flexibility and convenience.

UPI credit cards can be used through popular mobile apps such as Paytm, PhonePe, MobiKwik, BHIM, and Airtel Money, as well as apps provided by various banks. The Reserve Bank of India (RBI) enabled this feature in June 2022 by allowing credit cards to be linked to UPI. This step was a response to the growing preference for UPI among younger users who find traditional credit card processes, such as swiping at POS terminals and entering OTPs, cumbersome.

The Advantages of UPI Credit Cards

1. Pay Even Without Funds in Your Bank Account
   UPI credit cards allow you to make payments even if you don’t have money in your savings account at the time of the transaction. The amount is charged to your credit card, which you can repay during the card’s billing cycle. This feature is particularly useful for managing short-term cash flow issues or making urgent payments.
2. Streamlined Financial Records
   Regular UPI payments linked to your bank account can clutter your bank statement with dozens of small transactions. UPI credit cards solve this problem by consolidating all payments into a single entry on your bank statement when you pay your credit card bill.
   • Example: If you make 100 small transactions in a month using UPI linked to your bank account, each transaction is listed separately in your statement. However, if these payments are made via UPI credit card, they appear as a single consolidated payment in your bank statement after you settle the credit card bill.
3. Access to Credit Card Benefits
   Using a UPI credit card enables you to enjoy the rewards and benefits that come with credit cards, such as:
   • Cashback and Reward Points: Earn points or cashback for every UPI payment.
   • Offers and Discounts: Avail of exclusive deals provided by credit card issuers.
   • Credit Building: Improve your credit score by using the card responsibly.
4. Enhanced Reach of Credit Card Payments
   UPI is widely accepted across India, from large retail stores to local street vendors. By linking your credit card to UPI, you can use your credit card in places where traditional card machines (POS terminals) are not available, effectively increasing the reach of credit payments.

How UPI Credit Cards Work

1. Linking Your Credit Card to UPI
   Instead of linking your UPI app to your bank account, you link it to your credit card. This feature is currently available for RuPay credit cards issued by various banks.
2. Transaction Process
   When making a payment via UPI, the amount is debited from your credit card rather than your bank account. The process remains as seamless as any UPI payment: scan the QR code, enter the amount, and confirm the transaction.
3. Repayment Cycle
   Like any credit card, you settle your bill during the card’s billing cycle. This includes all UPI transactions made during the period. Timely repayment ensures you avoid interest charges and helps you maintain a good credit score.

Who Can Use UPI Credit Cards?

Currently, this service is available for users with RuPay credit cards, which can be linked to UPI apps. Many banks have already started offering this feature, and it is expected that other card networks like Visa and Mastercard may follow suit in the near future.

Why UPI Credit Cards Are a Game-Changer

1. A Boost for the Digital Economy
   UPI credit cards bridge the gap between digital payments and credit access, encouraging more merchants and consumers to adopt cashless transactions.
2. Convenience Without Compromise
   Users no longer need to carry physical credit cards or rely on POS machines for transactions. Payments can be made using just a smartphone, anytime and anywhere.
3. Empowering Small Businesses
   Small vendors and shopkeepers, who primarily accept UPI, can now benefit from customers paying with credit. This boosts sales and expands their customer base.

The Future of UPI Credit Cards

With their ability to combine the flexibility of credit with the ubiquity of UPI, these cards are poised to transform the payments ecosystem. As more banks and payment networks adopt this technology, UPI credit cards will likely become a standard payment method, empowering users with better financial flexibility and streamlined payment processes.

If you value the ease of UPI but also want to leverage the power of credit cards, it’s time to explore UPI credit cards – the future of seamless and flexible payments.