In NEW DELHI: According to a survey released on Thursday, as cash transactions continue to drop, the universal payments interface (UPI)-based transactions that make up India’s e-commerce business are expected to expand from $83 billion in 2022 to $150 billion in 2026.
According to the “2023 Global Payments Report” by global financial technology pioneer FIS, UPI achieved the largest year-over-year rise of transaction volume at 74.1% as of January 2023, and digital wallets increased from 5% of POS value in 2019 to 35% in 2022 thanks to UPI.
With the development of its next-generation real-time payments (RTP) infrastructure, India has become a global leader in payments, with cash use falling from 71% of POS transaction value in 2019 to just 27% in 2022.
The results showed that UPI helped e-commerce account-to-account (A2A) payments increase to $12 billion, up 53% from 2021 to 2022.
According to Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS, “UPI is making India a leader in payments across not only the region, but also the globe,” as it simultaneously moves customers away from cash and promotes financial inclusion.
Other central banks’ creation of real-time payment systems and, more importantly, their cooperation with one another are promoting cross-border trade and giving businesses a great potential for future growth, he continued.
While there are still cash transactions, UPI is increasingly used for the majority of peer to peer transactions.
The analysis predicts that by 2026, the value of transactions involving cash will have decreased by 34% while those involving digital wallets would have increased by 88%.
The size of the online ecommerce business is anticipated to increase by 82% by 2026, giving digital payments an even bigger boost.
Shaktikanta Das, governor of the Reserve Bank of India (RBI), stated earlier this month that the number of payments made through UPI increased significantly over the last 12 months, with daily transactions surpassing 36 crore from 24 crore in February 2022. These deals had a value of Rs. 6.27 lakh crore.