Unified Payments Interface (UPI) is expected to account for 90% of retail digital transactions volume in the next five years, said the Reserve Bank of India (RBI) bulletin. In 2022-23, it was 75.6%.

UPI transactions in May 2023 touched Rs 14.3 trillion in terms of value (up 2% from Rs 14.07 trillion in April 2023) and 9.41 billion in volume (up 6% from 8.89 billion in April). 

The payments infrastructure saw a 143% year-on-year growth in successful transactions under the UPI Autopay feature and a 23% YoY rise in new mandate registrations, said the RBI in its bulletin released on Friday.

The growth in payments was reinforced by a rapid scaling up of the payment acceptance infrastructure. 

The proliferation of UPI quick response (QR) codes, up by 44% YoY and point-of-sale (PoS) devices by 27%, continued to provide consumers and merchants with cost-effective and expeditious payment options.

Furthermore, person-to-merchant (P2M) payments have gained prominence, comprising 57% of the total transaction volume through the UPI.

"With the linking of Rupay credit cards to UPI, the share of P2M transactions in value terms is also anticipated to rise, owing to a higher average ticket size of credit card purchases than UPI," the report said.

With rising digital transactions and withdrawal of  2,000 bank notes, the overall currency in circulation, which forms the largest component of reserve money, decelerated to 5.3% from 8.3% a year ago, it added.

The bulletin is a monthly publication that offers insights into the developments in domestic and global economies. It doesn’t represent the views of the RBI.