Blog

The Unified Payments Interface (UPI) — the digital infrastructure for online financial services in India — has touched a new benchmark, with over Rs 5 lakh crore worth of transactions recorded for March.

The transaction value for March stood at Rs 5,04,886 crore, with a volume of 2.73 billion transactions, according to a tweet by the National Payments Corporation of India (NPCI), which runs the UPI platform.

This new benchmark indicates a 145 percent growth in UPI transaction value over the last year. In March 2020, the amount stood Rs 2,06,462 crore at 1.24 billion transactions.

The strides made by UPI over the last year has been rapid, receiving major traction when the government announced the first phase of lockdown to combat the COVID-19 pandemic. This resulted in increased reliance on digital payment platforms.

In fact, this new benchmark comes at a time when new developments are surrounding the UPI platform, with the Reserve Bank of India (RBI) inviting applications for setting up a new network for digital financial transactions — a rival to the NPCI-owned UPI called, New Umbrella Entity (NUE).

According to reports, around six consortiums have submitted their bids for NUE, including Tata Group, Reliance Industries, Paytm, ICICI-Axis Bank, India Post, and iServeU.

As per the RBI guidelines, the NUE will be a for-profit entity that will foster competition and de-risk the reliance on a single platform like UPI.

At the same time, NPCI has also come out with new guidelines that bar any third-party apps — PhonePe, and Google Pay, among others — to have more than 30 percent market share.

However, industry observers believe it would be challenging to implement such a proposal and could be self-defeating.

Walmart-backed PhonePe is the leading third-party app on the UPI platform, followed by Google Pay.

According to PhonePe, the digital payments platform has crossed over a billion transactions on the UPI platform for March. It took over Google Pay as the market leader a couple of months back.