- Infrastructure has positioned UPI as the preferred mode of real-time transactions for millions of users across India, Finance Ministry says.
The digital payments landscape in India has undergone a remarkable transformation over recent years, signified by a dramatic surge in transaction volume and value.
According to the Ministry of Finance, the number of digital payment transactions skyrocketed from 2,071 crore in fiscal year 2017-18 to an astounding 18,737 crore in fiscal year 2023-24, reflecting a compounded annual growth rate (CAGR) of 44 per cent.
The substantial increase underscores a paradigm shift in consumer behavior and financial infrastructure propelled by technology and government initiatives.
In tandem with the volume growth, the value of digital transactions has also experienced notable expansion. It grew from Rs1,962 trillion to Rs3,659 trillion  in FY24, at a CAGR of 11 per cent.
Furthermore, in just the first five months of FY25, the transaction value reached Rs1,669 trillion, illustrating a robust and sustained upward trajectory in financial exchanges facilitated through digital platforms.
A significant component of this revolution is the Unified Payments Interface (UPI), which emerged as a frontrunner in the digital payment ecosystem. UPI transaction volume surged from 92 crore in FY 2017-18 to 13,116 crore in FY 2023-24, achieving a remarkable CAGR of 129 per cent.
Exponential growth
The value of UPI transactions followed suit, rising from Rs1 trillion to Rs200 trillion, with an extraordinary CAGR of 138 per cent. The recent statistics further reveal that UPI has begun to facilitate transactions in seven countries, including prominent markets such as the UAE and Singapore, indicating India’s growing digital footprint on the global stage.
The expansion of digital payments has been largely attributed to the seamless user experience, which is facilitated by a comprehensive network of banks and fintech platforms.
As noted by the Finance Ministry, this infrastructure has positioned UPI as the preferred mode of real-time transactions for millions of users across India.
Moreover, the peer-to-merchant (P2M) transactions constituted a significant 62.40 per cent of the overall digital transactions in August, with a substantial portion valued at Rs500 or less, highlighting the accessibility of digital payments for everyday transactions.
This burgeoning ecosystem has not only transformed domestic financial practices but has also made India a global leader in real-time payment transactions.
The ACI Worldwide Report 2024 indicates that approximately 49 per cent of the world’s real-time payment transactions occur in India, underscoring the country’s pivotal role in the global digital payments landscape.