New Delhi: The Unified Payments Interface (UPI) has achieved 15,547 crore transactions worth Rs 223 lakh crore from January to November this year, the Finance Ministry said on Saturday.

The ministry, in a social media post on X, stated that the UPI transaction figures showcase its transformative impact on financial transactions in India.With a social media hashtag, FinMinYearReview2024, on X, the ministry highlighted the significance of UPI, which is getting prominence in countries across the globe. 

India’s digital payments revolution is gaining international momentum, with both UPI and RuPay expanding rapidly across borders. Currently, UPI is operational in seven countries, including key markets like the UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, and Mauritius.UPI is a digital payment system that allows users to make instant money transfers between bank accounts.

Launched in 2016 by the National Payments Corporation of India (NPCI), UPI has revolutionised the nation’s payment ecosystem by integrating multiple bank accounts into a single mobile application.

This system enables seamless fund transfers, merchant payments, and peer-to-peer transactions, offering users flexibility through scheduled payment requests.UPI has not only made financial transactions fast, secure, and effortless, but it has also empowered individuals, small businesses, and merchants, driving the country’s shift toward a cashless economy.

In October 2024, the Unified Payments Interface (UPI) achieved a historic milestone by processing 16.58 billion financial transactions in a single month, underscoring its pivotal role in India’s digital transformation.

UPI processed an impressive Rs 23.49 lakh crores across 16.58 billion financial transactions in October 2024, marking a 45 percent year-on-year growth from 11.40 billion transactions in October 2023, as per the Ministry of Finance figures.With 632 banks connected to its platform, this surge in usage highlights UPI’s expanding dominance in India’s payment landscape.

UPI has had a profound impact on small businesses, street vendors, and migrant workers, offering them an easy and efficient way to transfer money and receive payments. Its adoption was particularly accelerated during the Covid-19 pandemic, as people sought safer, contactless alternatives to cash transactions.

UPI’s success, however, extends beyond the strength of its infrastructure; it also stems from the behavioural shift it has inspired, where trust in the system and its accessibility have been key factors in driving widespread use.UPI’s entry into France is particularly significant, marking its first foray into Europe. 

This expansion enables Indian consumers and businesses to make and receive payments seamlessly, even while living or travelling abroad.As part of its global outreach, Prime Minister Modi has actively pitched for UPI’s expansion within the BRICS grouping, which now includes six new member states. 

This initiative is expected to further bolster remittance flows, improve financial inclusion, and enhance India’s stature in the global financial landscape.According to the ACI Worldwide Report 2024 cited by the Finance Ministry, India now accounts for around 49 percent of global real-time payment transactions as of 2023, underscoring India’s leadership in digital payment innovation. 

The National Payments Corporation of India (NPCI) is reportedly taking a firm stance against unauthorised use of virtual IDs generated for Unified Payments Interface (UPI) transactions. According to a report in Economic Times, certain fintech firms have been offering a service that allows businesses to authenticate users using their UPI IDs, a practice that violates NPCI and Reserve Bank of India guidelines.All member banks and third party payment apps have also received a copy of the letter.
In a letter to fintech companies, NPCI has instructed them to discontinue these unauthorised services. The letter states that UPI APIs are solely for facilitating UPI payments and user verification for fraud prevention and should not be used for any other purpose.
“NPCI has observed instances of unauthorised use of UPI APIs by certain participants. In accordance with the guidelines set forth…the UPI APIs provided by NPCI are strictly for the purpose of facilitating “UPI payments” for customers and for required verification of users for fraud prevention. These APIs must not be used independently for any other purposes other than the above mentioned,” the letter read.

NPCI warns of severe action for violation of deadline

Identity verification platforms, payment aggregators, and other fintechs have been offering this service by leveraging UPI application processing interfaces (APIs) provided by NPCI. These APIs enable businesses to integrate their systems and facilitate information flow.
NPCI has emphasised that participating members are prohibited from entering into commercial arrangements with third parties for the provision of “APIs as a service.” Any violations of these guidelines will be dealt with strictly, including penalties or cessation of UPI services. “Any violation of these compliance guidelines will be dealt with the utmost severity, including the imposition of penalties or cessation of UPI services,” the letter added.
By using the NPCI network for UPI payments, these platforms can verify various details of a user, such as their name, bank account status, mobile number, and alternate UPI IDs. This information is valuable for consumer-facing brands to authenticate users, prevent fraud, and build stronger customer profiles.
While some fintech firms have halted this service, others continue to offer it. The regulatory scrutiny on fintechs has intensified, with authorities closely examining their business practices and compliance with guidelines.

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