India leads global payments domain

New Delhi: Thanks to the massive adoption of unified payments interface (UPI) based digital transactions, India now makes faster payments than any other country in the world, an International Monetary Fund (IMF) note has emphasised.

Since its launch in 2016, UPI has grown quickly, while some proxies for cash usage have begun to decline. UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India, according to the note titled ‘Growing Retail Digital Payments: The Value of Interoperability.’

UPI is an instant payments platform built over the Immediate Payment Service (IMPS) infrastructure.

UPI has transformed the digital payments landscape in India. Evidence from the platform suggests that interoperability can improve users’ experience of digital payments and expand overall adoption.

“Interoperability directly increases users’ freedom to choose their favourite app, enabling them to take full advantage of the variety and quality of apps available. Interoperability can also facilitate entry by new providers and incentivise existing providers to upgrade their apps, offering indirect benefits to users,” said the IMF note.

UPI volumes in June grew 32 per cent year-on-year. Transaction value rose 20 per cent compared to June last year. The number of daily UPI transactions rose to 613 million in June from 602 million in May.

As a result, interoperability can make adopting digital payments more attractive for users.Hence, increase overall adoption relative to a world with only closed-loop alternatives.