Non-cash transaction volume is likely to reach almost 1.3 tn globally by this year, a nearly 16.6% (year-over-year) growth rate, as India sees exponential growth in the use of Unified Payments Interface (UPI)-based payments, a report showed today.

By 2027, non-cash transaction volumes are expected to reach about 2.3 tn, doubling since 2022, according to the ‘2023 World Payments Report’ by a research institute.

UPI’s growth and enhancements

Powered by a real-time network and open banking, UPI in India reported exponential growth of 1.9 times in volume and nearly 1.8 times in transaction value from 2021 to 2022.

“UPI transaction value and volume overtook credit and debit card totals by a significant margin in 2022 as UPI A2A payments became the preferred payment instrument for consumers and businesses in India,” said the report.

India’s central bank plans a new UPI feature which will enable consumers to block their account funds and complete payments after service delivery.

The feature will likely boost UPI use for e-commerce and replace cash on delivery.

UPI crossed 10 Billion transactions in August

“In India, payment data localisation through RBI regulations and initiatives is driving competition, harmonisation, innovation, and transparency in the industry,” the report mentioned.

The UPI-based payments crossed 10 bn monthly transactions in August for the first time, according to the National Payments Corporation of India (NPCI). Monthly transaction count on UPI crossed 10.24 bn with a net transaction value of ₹15.18 tn.

Global shift in the payment method

At a regional level, digital payments will grow by 19.8% across the Asia Pacific, 10.7% in Europe, and 6.5% in North America by 2027.

“The current model of tackling cash management services needs an overhaul. Corporate executives are feeling the pressure from mounting inefficiencies across lengthy cash conversion cycles,” said a payments services executive at the research institute.

Globally, retail payments comprise 59% of total transaction volume while commercial payments comprise 41%.

In the APAC region, the split between commercial and retail payments value share is nearly 50% each, the findings showed.

New payment solutions and key industry initiatives are fueling the growth of digital payments among enterprises.

Expectations are also changing, with 63% of corporate clients demanding a retail-like payment experience from their banks in 2023, the report noted.

(Source: IANS)

-Edited for style

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