UPI has effectively replaced much of the currency in circulation: SBI report

State Bank of India (SBI) in its latest report has said that UPI has effectively replaced much of the currency in circulation. It also said that unlike popular perception, semi-urban areas account for one-third of the share in value of UPI transactions. 

The report said that the top 15 states, including Andhra Pradesh, Maharashtra, Telangana, Karnataka, Uttar Pradesh, Rajasthan, Tamil Nadu, Bihar, West Bengal, Odisha, Kerala, Madhya Pradesh, Gujarat, Assam and Haryana, accounted for almost 90 per cent of share in value/volume. The average ticket size of these 15 states ranges between Rs 1,600-2,000. 

The report also said that 67 per cent of UPI transactions in the person-to-merchant segment and 87 per cent in the person-to-person segment are for transactions over Rs 2,000. 

The top 100 districts accounted for ~45 per cent share in UPI value/volume. “Thus, UPI has effectively replaced much of the currency in circulation,” the SBI report added. 

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Metros account for 20 per cent share in volume/value, urban areas 20 per cent, rural areas 25 per cent and semi-urban areas 35 per cent. 

UPI accounted for 52 per cent of the total 8,840 crore financial digital transactions in FY22, the Economic Survey 2023, released earlier this year, had stated. The survey stated that UPI-based transactions in value and volume terms were 121 per cent and 114 per cent respectively. In December 2022, UPI touched its highest-ever mark with 782 crore transactions worth Rs 12.8 lakh crore.

India aims to take the UPI service to countries such as Bahrain, Saudi Arabia and others. Talks are on with several countries and are in the early stages. Bhutan became the first country to adopt UPI in 2021, followed by Nepal in 2022. India and Singapore linked their national payments systems this year. 

Additionally, Japanese Digital Minister Kono Taro stated last month that Japan and India are trying to promote digital cooperation. “We are now seriously thinking about joining Indian UPI, the payments system and also, we are contemplating how we can mutually recognise e-ID, for well – starting with cooperation, so we can increase interoperability,” said the minister. 

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Also read: NPCI plans to take UPI to Saudi Arabia, Bahrain, other Gulf countries: Report