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From UPI to Global Leadership: How India Became a Powerhouse in the Payments Ecosystem
Whether it is ordering food from home or buying metro tickets without approaching the ticket counter, UPI payments have completely transformed how we live our daily lives. From small vendors to high-rise retailers, digital transactions are the new normal. Launched in 2016, UPI transaction volume grew from 92 crore in FY 2017-18 to 13,116 crore in FY 2023-24, with the value rising from ₹1 lakh crore to ₹200 lakh crore in the same period. This represents a compound annual growth rate (CAGR) of over 129% in volume and 138% in value. With the vision of a cashless and inclusive economy, many other countries like the UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, Mauritius etc, have expressed their interest in replicating the same system.
The USP of the UPI payments
UPI’s genius lies in its simplicity and accessibility. Built as a real-time, interoperable, and mobile-first payment solution, UPI digitized and democratized transactions. It enabled a kirana store in a tier-3 town and a tech-savvy millennial in a metro city to use the same platform with equal ease. Its zero-cost, instant architecture lowered barriers for millions, empowering small businesses and individual users alike. Considering UPI simply as a tech product would be wrong, it has acted more as a catalyst in our economy. Financial inclusion became a tangible reality as more citizens entered the formal economy. The presence of interoperable QR codes, bank-neutral apps, and instant settlements meant even the smallest transaction, like buying vegetables or paying a domestic helper, became traceable, safe, and swift. This behavioral shift has been the cornerstone of India’s new digital economy.
The ecosystem that made it possible
What truly powered UPI’s meteoric rise was the ecosystem around it. Visionary regulatory leadership from the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) ensured that innovation was not throttled by excessive caution but guided by intelligent oversight. Security, transparency, and scalability were built into the system from day one. Initiatives like Aadhaar and Jan Dhan created the groundwork by providing digital identity and bank access to millions. These became foundational enablers. The synergy between public infrastructure and private innovation, particularly from India’s fintech startups, turned UPI from a government-backed initiative into a nationwide movement. Let’s not forget the cultural shift that made this adoption stick. For decades, cash was king in India. Changing that mindset required trust, convenience, and repeated positive user experiences. UPI delivered all three.
Setting the global standards
In 2023, UPI accounted for nearly half of all real-time digital payments globally. This is an unprecedented scale. From the crowded markets of Kanpur to cafes in Dubai and retail stores in Singapore, UPI is now going global. Partnerships enabling cross-border payments with countries like France, Mauritius, and the UAE signal a new era where India is emerging as a leader in payments innovation. What’s even more noteworthy is that other nations are now studying UPI’s architecture for its technology but also for its regulatory framework and public-private model. This represents a significant shift in global perception. For a long, India imported innovation. With UPI, it’s exporting it.
The road ahead
India’s digital payment success story is far from over. As the world eyes open banking, embedded finance, and AI-driven fintech solutions, the foundations laid by UPI will be instrumental in what comes next. But we must continue to nurture this ecosystem by keeping it inclusive, by innovating responsibly, and by ensuring that digital progress does not leave behind the digitally challenged. The journey from local adoption to global admiration was made possible by a shared vision across sectors. As we look ahead, UPI is a credible template with India helping shape it further for the world.
Authored By Saptarshi Sashi, VP-Business Expansion, ToneTag
[Disclaimer: The views expressed are solely of the author and Analytics Insight does not necessarily subscribe to it. Analytics Insight shall not be responsible for any damage caused to any person/organization directly or indirectly.]
