As Unified Payments Interface (UPI) turns 10 years’ old, this landmark coincides with technical disruptions and peak hour congestions. Particularly, the mandatory requirement of 24-hour prior pre-debt notifications has increased technical declines in recurring payments.
The initiative of UPI had its origin in year 2009 when National Payments Corporation of India (NPCI) was established to integrate all payment mechanisms in the country for uniformity and ease of transaction. In year 2012, the framework for UPI was made and it was pilot launched in April 2016 under the guidance of Dr. Raghuram Rajan, the then RBI governor.
Since its launch, UPI has been progressively achieving higher volumes. In 2025-26, UPI achieved 242 billion transactions and USD 3.7 trillion value, which is 90 per cent of India’s GDP. Backed by its increasing volumes, India’s UPI became world’s largest real-time payment system surpassing global volumes of Visa.
Cost efficiency, ease of usage and swiftness are the reasons behind the shift from debit and credit card transactions to UPI. This platform is currently serving 50 crores users and connected with more than 700 banks. The payment to merchant (P2M) transactions are 63 per cent of total volume within which 86 per cent are micro-payments below Rs. 500 per transaction.
Until now, cumulatively, UPI has saved USD 100 billion and continues to save USD 10 billion every year. The government has achieved significant savings through its Public Financial Management System (PFMS) and Direct Benefit Transfers (DBT) by transacting through UPI. These imputed savings are helping increase trade volumes and the economic growth of the country.
While NPCI, the parent organisation of UPI operates several instruments, UPI alone accounts for 85 per cent of the total transaction volume. Some of the instruments are already integrated with UPI and the research is underway to integrate most of them. NPCI’s other instruments include BHIM (Bharat Interface for Money), UPI Lite, BBPS (Bharat Bill Payment System), RuPay, NACH (National Automated Clearing House), IMPS (Immediate Payment Service), FASTag (NETC), AePS (Aadhar Enabled Payment System), NFS (National Financial Switch), CTC (Cheque Truncation System) and NCMC (National Common Mobility Card).
NPCI is also exporting its UPI and RuPay services to Singapore, UAE, France, Bhutan, Nepal, Sri Lanka and Mauritius.
Currently, the lifeline for UPI is QR (Quick Response) code. Toyota invented QR code in 1994 and gifted it to the world as an open source for free usage. Since then, globally QR code has conducted transactions of about USD one quadrillion.
Although QR has an ISO code with international standard, it has few limitations, like dependence on mobile camera quality, light quality and need for proximity for physical scanning. Certain instances revealed usage of malicious QR code, overlays, spoofing and frauds. Absence of offline access is another limitation. These limitations call for further innovation and improvements. Since UPI is exporting its services and network to other countries, NPCI should explore a unique medium which could be provide an improved QR code or any better alternative.
Further, UPI is yet to tap B2B and corporate payments and, hence, its present value share of 9 per cent has significant potential for growth. The increasing level of digital infrastructure can support a framework where every person to have a smartphone, UPI linkage and a national digital identity. Such identity may link with Aadhaar, PAN and other regulatory numbers.
UPI can also be made mandatory for all the banks and NBFCs, which will limit the scope for cash hoardings and can contain the cash in circulation.
NPCI should also address other challenges such as digital security and compulsory internet requirement. It should also enhance data storage strength, risk diversification and multi-modal infrastructure systems to prevent physical, technological or digital attacks.
For now, 10-year milestone by UPI deserves celebrations for positioning India as the world’s top fintech country, assisted by its indigenously developed technology for financial transactions.
