UPI Transactions in India Set to Skyrocket to 1 Billion Per Day by 2026-27, Says PwC Report!

According to a report by PwC India titled “The Indian Payments Handbook – 2022-27,” Unified Payments Interface (UPI) transactions are expected to reach a remarkable milestone of 1 billion transactions per day by 2026-27. UPI, which has been instrumental in driving the digital payments revolution in India, accounted for about 75% of the total transaction volume in the retail segment during 2022-23. The report projects that UPI is expected to account for an impressive 90% of the total transaction volume in the retail digital payments landscape over the next five years. The Indian digital payments market has witnessed consistent growth, with a compounded annual growth rate (CAGR) of 50% in terms of transaction volume, and the report predicts that this growth trajectory will continue. The report also acknowledges the significance of the credit card segment, which continues to experience robust growth. Card payments, including both debit and credit cards, remain popular instruments for retail digital payments after UPI. However, the report foresees a shift in dominance between debit and credit cards, with credit card transactions expected to surpass debit card transactions by FY 2024-25. The decline in debit card usage is attributed to the fact that cash withdrawal, which has been a primary use case for debit cards, can now be conveniently replaced by UPI-based cash withdrawal methods. The report highlights that the payments industry will focus on ecosystem expansion and the development of new use cases for existing payment platforms in the coming years. Areas such as embedded and ecosystem finance, digital lending based on payment transactions, and offline payments are expected to drive the next phase of growth in the payments industry. The report also sheds light on the credit card business, highlighting its significant revenue contribution to the overall card market. In 2022-23, revenue generated through the credit card segment accounted for nearly 76% of the total cards’ revenue, making it an attractive and lucrative business segment for banks, non-banking financial companies (NBFCs), and fintech firms.