In September, the volume of transactions through the Unified Payments Interface (UPI) decreased by 1.8%, reaching 24.07 billion operations compared to a record 24.51 billion in August. This decline occurred amidst concerns among market participants regarding the introduction of the Merchant Discount Rate (MDR), which is scheduled for October 15.
According to the National Payments Corporation of India (NPCI), transactions also decreased by 1.5% in value, amounting to ₹29.37 trillion versus ₹29.82 trillion for the same period. Nevertheless, on average per day, Indians conducted 802 million UPI payments worth ₹97,913 crore, marking both the highest figure and the first instance of daily UPI payments exceeding the 800 million mark.
Ridhu Datta, co-founder of Cashfree, explained this increase, noting the start of the festive season. She pointed out that from April to August, average daily receipts via UPI hovered around ₹96,000 crore because most new payments were small. However, in September, people's additional spending was higher than usual, significantly boosting the daily value.
This data emerged against the backdrop of concerns from trade organizations about the introduction of MDR for certain UPI transactions. Previously, UPI operated without charges for six years. Now, NPCI is introducing an MDR structure for selected UPI payments, effective October 15.
Under the new rules, peer-to-peer (P2P) transactions will not be charged. However, peer-to-merchant transactions exceeding ₹2,000 will incur a fee of 0.40 percent, capped at ₹300. Furthermore, payments to small merchants classified as P2PM (peer-to-peer merchant) who receive up to ₹1 lakh per month via UPI will remain free from MDR, which is particularly beneficial for small businesses in rural and semi-urban areas.
In September, the volume of UPI transactions grew by 23% compared to last year, and in value, by 18%. Dipak Chand Thakur, Managing Director and CEO of NPST, predicts that this momentum will continue due to the onset of festivals, as consumers increasingly use UPI for both online and offline purchases.
Regarding other systems, Immediate Payment Service (IMPS) transactions declined by more than 1.7%, totaling 354 million in September compared to 360 million in August. In value, IMPS increased to ₹7.06 trillion from ₹7.04 trillion. The number of IMPS transactions in September fell by 10% year-on-year, but their total value increased by 18%. The daily number of IMPS transactions rose from 11.61 million in August to 11.80 million in September, leading to a daily transaction value of ₹23,530 crore in September, compared to ₹22,701 crore in August.
The Aadhaar Enabled Payment System (AePS) showed an 8% decline during the month, reaching 95.78 million transactions in September. Transaction value also decreased by 9%, amounting to ₹23,734 crore compared to ₹26,035 crore in August. The daily number of AePS transactions dropped from 3.35 million to 3.19 million, and the daily transaction value fell from ₹840 crore to ₹791 crore.