The value of UPI transactions made using the Unified Payments Interface (UPI) crossed $100 billion in a month for the first time in October.
Benefits of UPI transactions
UPI is a big leap for the payment system in a growing economy like India, enabling the customers to transact without paper money and comes with a lot of benefits. Better customer experience is one of the key advantages of using UPI in the payment system. UPI is expected to benefit the banks as the service can be provided by the financial service provider to the merchant via a basic smartphone
Reason for this Spurt
In September 2021, UPI had registered 3.6 billion transactions worth Rs 6.5 lakh crore. In October 4.2 billion UPI transactions amounting to Rs 7.71 lakh crore (about $103 billion) were recorded, marking an all-time high.
This sudden rise in the value of UPI is largely due to the increased demand for online shopping during the festive season sales and also because of the gradual reopening of the economy after the second wave. Also due to the pandemic, people nowadays prefer online transactions to cash payments.
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Over the years, UPI has passed several significant milestones since its launch in 2016. For the first time in October 2019, it crossed a billion transactions. Meanwhile, the number of transactions has increased by more than 83% since January 2021. It remains to be seen how things turn out in the future.
Other Digital Payment Modes
Meanwhile, other digital payment modes also witnessed a sharp rise recently. IMPS touched an all-time high both in terms of number and value of transactions. It recorded 430.67 million transactions worth Rs 3.70 trillion in October.
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