Unified Payments Interface (UPI), the real-time payment system operated by National Payments Corporation of India ( NPCI), processed 18.68 billion transactions in May, recovering from a dip in April.
In April, UPI had processed 17.89 billion transactions, down from 18.30 billion in March, amid multiple outages that disrupted payment services. By value, transactions via UPI totalled Rs 25.14 lakh crore in May, up from Rs 23.95 lakh crore in April, according to data released by NPCI on Sunday.
The May figures also mark a 33% year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at Rs 81,106 crore, while the average daily transaction volume was 602 million.
Since its launch in 2016, UPI has grown rapidly, driven by government efforts to push digital payments post-demonetisation, increased smartphone penetration, and the entry of private players like Google Pay, PhonePe and Paytm. However, the platform’s breakneck growth has started to slow as it approaches saturation, ET reported on April 7.
NPCI data also showed that the Immediate Payment Service (IMPS) processed 464 million transactions worth Rs 6.41 lakh crore in May. Meanwhile, the Aadhaar-enabled Payment System (AePS) recorded 105 million transactions, and Fastag volumes reached 404 million during the month.
“The dip in April was a seasonal fluctuation. UPI continues to grow strongly, and we see this as a sign of increasing maturity in user behaviour, with UPI becoming the default mode of payment across user segments,” said Deepak Chand Thakur, CEO and cofounder of Network People Services Technologies, a digital payment and fintech infrastructure provider.
Wide disruptions
UPI has experienced multiple service disruptions in recent months, with thousands of users unable to complete payments or fund transfers. NPCI attributed the outage on April 12 to a surge in API requests—particularly from certain banks overusing the “Check Transaction” API—which led to a temporary system slowdown and reduced payment success rates for several hours.
As of April, PhonePe and Google Pay continue to dominate the space, accounting for over 80% of UPI market share. Newer players such as Flipkart-backed Super.Money, Navi, BHIM and Cred are gradually increasing their presence through cashback offers and other incentives. NPCI has yet to release app-wise transaction data for May.
To further push adoption, the Union Cabinet recently approved the continuation of a Rs 1,500 crore incentive scheme to offset the cost of small-value digital transactions for stakeholders in the UPI ecosystem. However, the move drew criticism from fintech firms, which argue that the funds are insufficient given the scale of transactions.
In March, the Payments Council of India, which represents digital payment companies, wrote to Prime Minister Narendra Modi seeking the reintroduction of the merchant discount rate (MDR) on UPI and RuPay debit card transactions. The industry body recommended a 0.3% MDR on UPI payments for large merchants and a nominal MDR on RuPay debit card transactions for all merchants.
To ensure long-term stability and reduce concentration risk, NPCI extended the deadline for implementing a 30% market share cap on third-party UPI apps like PhonePe and Google Pay to December 2026. The cap, first proposed in 2020, has been postponed multiple times largely due to a lack of strong challengers in the market. Internationally, UPI is expanding its footprint in countries including Singapore, the UAE, Mauritius, Sri Lanka, France, Bhutan and Nepal.
“We expect this momentum to sustain driven by deeper rural adoption, wider merchant acceptance, the evolution of new use cases such as credit via UPI, and the expansion of cross-border payment corridors,” said Thakur of Network People Services Technologies.
In April, UPI had processed 17.89 billion transactions, down from 18.30 billion in March, amid multiple outages that disrupted payment services. By value, transactions via UPI totalled Rs 25.14 lakh crore in May, up from Rs 23.95 lakh crore in April, according to data released by NPCI on Sunday.
The May figures also mark a 33% year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at Rs 81,106 crore, while the average daily transaction volume was 602 million.
Since its launch in 2016, UPI has grown rapidly, driven by government efforts to push digital payments post-demonetisation, increased smartphone penetration, and the entry of private players like Google Pay, PhonePe and Paytm. However, the platform’s breakneck growth has started to slow as it approaches saturation, ET reported on April 7.
NPCI data also showed that the Immediate Payment Service (IMPS) processed 464 million transactions worth Rs 6.41 lakh crore in May. Meanwhile, the Aadhaar-enabled Payment System (AePS) recorded 105 million transactions, and Fastag volumes reached 404 million during the month.
“The dip in April was a seasonal fluctuation. UPI continues to grow strongly, and we see this as a sign of increasing maturity in user behaviour, with UPI becoming the default mode of payment across user segments,” said Deepak Chand Thakur, CEO and cofounder of Network People Services Technologies, a digital payment and fintech infrastructure provider.
Wide disruptions
UPI has experienced multiple service disruptions in recent months, with thousands of users unable to complete payments or fund transfers. NPCI attributed the outage on April 12 to a surge in API requests—particularly from certain banks overusing the “Check Transaction” API—which led to a temporary system slowdown and reduced payment success rates for several hours.
As of April, PhonePe and Google Pay continue to dominate the space, accounting for over 80% of UPI market share. Newer players such as Flipkart-backed Super.Money, Navi, BHIM and Cred are gradually increasing their presence through cashback offers and other incentives. NPCI has yet to release app-wise transaction data for May.
To further push adoption, the Union Cabinet recently approved the continuation of a Rs 1,500 crore incentive scheme to offset the cost of small-value digital transactions for stakeholders in the UPI ecosystem. However, the move drew criticism from fintech firms, which argue that the funds are insufficient given the scale of transactions.
In March, the Payments Council of India, which represents digital payment companies, wrote to Prime Minister Narendra Modi seeking the reintroduction of the merchant discount rate (MDR) on UPI and RuPay debit card transactions. The industry body recommended a 0.3% MDR on UPI payments for large merchants and a nominal MDR on RuPay debit card transactions for all merchants.
To ensure long-term stability and reduce concentration risk, NPCI extended the deadline for implementing a 30% market share cap on third-party UPI apps like PhonePe and Google Pay to December 2026. The cap, first proposed in 2020, has been postponed multiple times largely due to a lack of strong challengers in the market. Internationally, UPI is expanding its footprint in countries including Singapore, the UAE, Mauritius, Sri Lanka, France, Bhutan and Nepal.
“We expect this momentum to sustain driven by deeper rural adoption, wider merchant acceptance, the evolution of new use cases such as credit via UPI, and the expansion of cross-border payment corridors,” said Thakur of Network People Services Technologies.
You may also like
GDP's Fine, But About Net Income?
Yelled 'Free Palestine', used makeshift flamethrower: What we know about 'targeted terror attack' in Colorado
PM Narendra Modi likely to flag off train to Kashmir on June 6
What Did India's Military Leaders Reveal About Modern Warfare After Recent Conflict?
Russian Education Fair 2025 Attracts Indian Students Eyeing Affordable Medical Degrees
