Support for India’s UPI user base expansion sought

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Dilip Asbe, managing director and chief executive of the National Payments Corporation of India (NPCI), is seeking substantial support from the Reserve Bank of India (RBI), the government, and the financial ecosystem to find ways for onboarding an additional 200-300 million people onto the Unified Payments Interface (UPI) platform.

The government-backed NPCI, responsible for powering the country’s digital payment revolution, has been expanding UPI usage within the country while NPCI International Payments Ltd (NIPL), the international arm of the NPCI, has been collaborating with international partners to boost additional access. The initiatives come at a time when UPI is already the most popular digital payment method, likely reaching a saturation point. While saturation does not mean the end of UPI’s expansion, especially in the international markets; UPI and similar payment methods may not necessarily remain the most preferred options for purchasing high-value items like cars and durable goods.

“We need significant support from the RBI, the government, and the ecosystem to on-board another 200–300 million people into the digital payments fold. Digital payments are now integral to life—I don’t think we’re going back to cash,” Asbe said, adding that UPI is capable of growing 10 times from its current base.

“We see around 450 million users using the UPI, with about 200 million daily active users. I think we are at the cusp of revolution now because, from here, the network effects will be added into the system,” Asbe stated.

“The UPI, from its current base, has the potential to grow 10x. We are at a stage now where we must aim for a 10x growth. I don’t know whether it will take 10 years or less, but 10x growth is possible,” Asbe added.

UPI’s expansion is also part of India’s exponential growth in the number of Internet users. According to a report by IAMAI and Kantar, India is expected to surpass 900 million Internet users by 2025, with the majority coming from rural areas. While growth has slowed, rural regions now make up 55% of Internet users. Over-the-top (OTT) streaming apps lead as the most popular activity, with digital commerce and payments also seeing notable participation from rural users.

According to the Ministry of Finance, India has witnessed an unparalleled rise in digital transactions, marking a significant milestone in its journey towards becoming a cashless society. At the forefront of India’s digital payment revolution is UPI with a record hit of 16.73 billion transactions in December 2024.

“Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. It has not only made financial transactions fast, secure, and effortless, but also empowered individuals, small businesses, and merchants, driving the country’s shift toward a cashless economy,” the Finance Ministry said in a statement.

In 2024, UPI processed around 172 billion transactions, marking a 46% increase from 117.64 billion in 2023. This rise underscores a broader cultural shift toward financial inclusivity, with UPI being a central pillar.

International collaboration

NPCI International Payments Limited (NIPL), the international arm of NPCI, has partnered with Magnati, a payment solutions provider in the Middle East, to advance QR-based UPI merchant payments using Magnati’s point-of-sale (POS) terminals in the United Arab Emirates. 

The collaboration aims to expand the QR-based merchant payment network in the West Asian country by enabling more merchants to provide UPI as a payment method to Indian travelers. The partnership will initially offer UPI acceptance across Dubai Duty Free zones, and is expected to improve the shopping and payment experience for Indian tourists. Future plans include expansion across key merchant categories like retail, hospitality, transport, and supermarkets.

India’s flagship UPI, an example of effective Digital Public Infrastructure (DPI), is recognized as one of the world’s most successful real-time payment systems.

“The partnership with Magnati is a strategic step towards expanding UPI acceptance in the UAE. This collaboration aligns with our vision of providing Indians with a global digital payments acceptance network and enhancing their payment experience abroad. Furthermore, it paves the way for broader economic and cultural connections between India and the UAE,” Ritesh Shukla, chief executive officer of NPCI International, said.

The partnership is set to offer seamless payment options to over 12 million Indians traveling to Dubai and the UAE each year. It integrates an Indian solution into the global digital payments network, enabling UAE merchants to better serve the expanding Indian consumer base. By expanding UPI acceptance in key markets such as the UAE, NPCI International aims to highlight India’s global leadership in digital payment innovation. This move is also expected to set a new benchmark for cross-border payment interoperability and strengthen economic and cultural ties between India and the rest of the world.

India is looking to expand UPI use across the world so that any Indian with a UPI account can make a payment using UPI. So far, UPI has expanded to Peru, Mauritius, Sri Lanka, Singapore, France, Bhutan and Nepal.

In 2025, UPI may expand to another four to six countries.

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