History-in-the-making: UPI to overtake Visa's daily transaction volume soon
What's the story
India's Unified Payments Interface (UPI) is on the verge of overtaking payments giant Visa in terms of daily transaction volume. This would make UPI the world's biggest retail interbank payment settlement platform.
On June 1, UPI processed 644 million transactions, and 650 million the following day.
Meanwhile, in FY24, Visa had an average daily transaction volume of 639 million, while its average daily transactions in the March quarter were reported to be 674 million.
Stats
UPI growing at a monthly rate of 5-7%
In May, UPI had an average transaction volume of 602 million per day. The payment system has been growing at a monthly rate of 5-7% and an annual rate of 40%, as more Indians embrace digital payments and internet penetration improves.
Goals
Targeting 1B transactions per day
The Indian government and the National Payments Corporation of India (NPCI), which runs UPI, have set a target of one billion transactions every day.
In terms of value, UPI transactions in May crossed ₹25 lakh crore, significantly surpassing all card transaction values.
In volumes, UPI is miles ahead, facilitating around 85% of all digital payments in the country.
Transaction methods
How UPI differs from card networks
Card networks like Visa and Mastercard follow a deferred settlement model for transactions. In this model, the transactions are bunched up and finally settled at the end of day or the next day. In contrast, UPI uses a real-time payment settlement solution for peer-to-peer (P2P) payments.