UPI transactions could double to 1 billion per day in the next few months: RBI Guv Das

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The number of UPI (unified payments interface) transactions could double to 1 billion per day in the next few months even as the Reserve Bank of India (RBI) is in no great hurry to immediately announce a nationwide rollout of the central bank digital currency (CBDC), Governor Shaktikanta Das said at the recent Annual International Banking Seminar, Washington DC.

Das underscored that when it comes to fast payments system (FPS), India, with its UPI is one of the pioneering countries. India has brought high efficiency into the payments system.

The payments are safer, faster, instant and cheaper.

“Today, the number of transactions that take place on UPI is about 500 million per day. That is a huge number of transactions. But then we are trying to step up even further and trying to reach 1 billion transactions, maybe, in the next few months. The number of transactions per day were about 300 million about a year ago.

“UPI actually has got a lot of potential for cross-border payments. We have also taken the initiative of linking the UPI with the FPS’ of other countries. We started the process by linking the FPS of Singapore (PayNow) with India’s UPI. And the effort is on to have similar arrangements with other countries,” the Governor said.

And on QR (quick response) code based payments, Das noted that India has linkages already with countries like Mauritius and South Asian countries such as Sri Lanka, Bhutan, and Nepal. And India is in discussion with several other countries in the middle-east and in Asia to have this linkage.

“So, UPI has proved its efficiency in cross-border payments. This will be particularly useful for students, business travellers, tourists, etc. We have now attempted and actually put in place a method for offline payments.

“In a large country like India, availability of connectivity is a problem in remote areas. Either the connectivity is weak or it is simply not there. We have now facilitated offline transactions on UPI. Going forward, I see the linkage of India’s UPI and the FPS of other countries….making global cross-border payments much more efficient than it is today,” the Governor said.

CBDC-e-rupee Pilot

Das observed that the e-Rupee pilot was launched by RBI sometime in November 2022, starting first on the wholesale mode (e₹-W) and then, followed within a month with the pilot on retail mode  (e₹-R).

“It is a pilot project and we are in no great hurry to immediately announce a nationwide rollout because we want to do the trials, fully convince ourselves about the design features, about the robustness, about the security of the CBDC and then only think of a nationwide rollout…The trials are going on, everyday there are learning experiences. We are constantly fine-tuning our systems,” he said.

Today, there are nearly 6 million e₹-R users, with approximately 5.5 million being retail customers (individuals) and around half a million comprising merchants, shops, and other establishments.

Das emphasised that CBDC and FPS acting in parallel will act as a back up for each other. “Imagine a situation where there is a technology problem in the FPS of a country due to some reason and the system gets jammed. But you have CBDC as a backup to ensure that payments go on in a normal manner,” he said.