UPI Crosses 700 Million Daily Transactions Milestone
- UPI hits record 707 million daily transactions on August 2, doubling in volume over two years.
- Fintechs and RBI urge reintroduction of MDR to ensure financial sustainability of the UPI ecosystem.
- Government subsidy cut from Rs 4,500 crore to Rs 1,500 crore sparks debate over who will bear rising infrastructure costs.
In a historic milestone for India’s digital payments landscape, daily Unified Payments Interface (UPI) transactions crossed the 700 million mark for the first time on August 2, reaching an all-time high of 707 million, according to data from the National Payments Corporation of India (NPCI).
This surge reflects a doubling in daily transaction volumes over the past two years. In August 2023, UPI recorded approximately 350 million transactions daily, which rose to 500 million in August 2024. With a consistent monthly growth rate of 5–7 percent, UPI is on track to meet the government’s ambitious target of 1 billion (100 crore) daily transactions by 2026.
Despite its success, the platform’s growth trajectory has slowed in recent months compared to the previous explosive expansion. Industry experts believe that reviving the Merchant Discount Rate (MDR) could provide the necessary push to achieve the billion-mark milestone. Payment companies and fintech associations have urged the government to consider reintroducing a marginal MDR, especially for high-value transactions and large merchants.
The government had eliminated MDR on RuPay debit cards and BHIM-UPI transactions in December 2019 and has continued to subsidize the infrastructure. However, the subsidy has been significantly reduced from Rs 4,500 crore in FY24 to just Rs 1,500 crore in FY25.
The Reserve Bank of India (RBI) has recently joined the call for a financially viable business model for UPI. RBI Governor Sanjay Malhotra emphasized the need to address the operational costs of the digital payments ecosystem. 'Costs will have to be paid. Someone will have to bear the cost', he noted, hinting at the unsustainability of a zero-MDR environment in the long run.
In July alone, UPI processed approximately 19.5 billion transactions worth over Rs 25 lakh crore translating to an average of 650 million transactions per day, valued at Rs 83,000 crore. With 85 percent of India’s digital payments and nearly 50 percent of global real-time transactions routed through UPI, it has now overtaken global giant Visa in terms of daily volume.
As internet penetration deepens and digital payment adoption rises, UPI is poised to remain the backbone of India’s financial future but the debate around who pays to keep it running is only just beginning.
