UPI use to reach 439 billion by FY29: PwC India report

Unified Payments Interface (UPI) use in India is estimated to reach 439 billion by the fiscal year 2028-’29 (FY29) from its current count of around 131 billion, a PwC India report titled ‘The Indian Payments Handbook 2024-29’ has said. The report adds 80 per cent of all retail digital transactions in the country are currently conducted using UPI, and the number could touch 91 per cent by FY29.

“In FY 2023-’24, the total transaction volume was slightly over 131 billion and is expected to grow to 439 billion by FY 2028-’29. UPI now accounts for over 80 per cent of the overall retail digital payments in India and is expected to contribute to 91 per cent by 2028-’29,” the report says.

Increase in volume of UPI transaction for the last fiscal (2023-’24, or FY24) was 42 per cent and the figure could be triple in FY29, the report adds. The year-on-year growth rate in volume of transaction is expected to be around 57 per cent.

WHAT LED TO UPI SURGE

Changing modes of business, growing awareness among users all over India, bigger opportunities of use and constant innovations by the industry are cited as some of the big reasons in the PwC report for the surge in UPI use.

Online and offline services such as payment gateways, payment aggregators and QR code scan have also contributed to seamless transactions and, hence, in popularising the interface. Services as these have surged at a rate of 25 per cent owing to growing reach of the QR code system, push from regulators in the industry and entry of new players. The growth in UPI use is happening all over the country — from the metropolitan cities to Tier-1, Tier-2, Tier-3, and Tier-4 cities and towns.

Overall, growing participation of public and private banks, non-banking financial companies (NBFCs) and fintech firms has helped, too, as has the ongoing integration of digital payment system with different marketplaces.

CREDIT CARD USE GOES UP

The report also focusses on the use of credit cards in India. Over 16 million credit cards were added in FY24. Credit card use increased by around 20 per cent, largely owing to young people, especially the Gen-Z population in towns and cities classified as Tier-2 cities or less. Credit card use in India is expected to reach 200 million by FY29. Debit cards, on the other hand, have been witnessing a drop in value and transaction volume.