UPI Transactions Up By 4 Times, Debit Card Usage Takes Back Seat: RBI Data

Recent data released by the Reserve Bank of India (RBI) has revealed that the Unified Payments Interface (UPI) has emerged as the most popular medium of money transfer, especially for small-value transactions while the growth of debit card usage declined.

In July 2023, the total debit card spending was Rs 3.15 trillion whereas it was Rs 2.81 trillion in July 2020, which is a mere increase of 12 per cent. Expenditure through UPI has seen a growth of 428 per cent, from Rs 2.90 trillion to Rs 15.33 trillion from the year 2020 to 2023. 

In August 2023, UPI transactions were Rs 10 billion for the first time in a month. Monthly UPI payments in value terms are now hovering at more than Rs 15 trillion.

In July 2020, banks had issued 852.35 million debit cards. Three years later, that number has touched merely 970.74 million, which reflects almost a flat growth trajectory. 

Notably, this was due to the Pradhan Mantri Jan Dhan Yojana (PMJDY), which gave account holders a debit card during the opening of a basic savings bank deposit account. 

With the government giving increased importance to digital payments and digital public infrastructure, the growth in UPI transactions is likely to continue with the number of transactions expected to touch 20 billion per month over the next 18 months. 

Meanwhile, credit card usage continues to grow, with spending rising to a record high of Rs 1.45 trillion in July 2023 as compared to Rs 0.45 trillion in July 2020.