 transactions experienced a modest decrease. The decrease marks an unusual downturn.){kind=link}
In November 2024, Unified Payments Interface (UPI) transactions experienced a modest decrease. The decrease marks an unusual downturn for the popular digital payment system. The total transaction dropped by 6.6%, reaching IN ₹1,548 crore, while overall transaction value decreased by 8.3% to IN ₹21.6 lakh crore. The marginal drop is linked to post-festival seasonal spending patterns and temporary economic fluctuations.
How Did UPI Perform Year-Over-Year Despite November’s Decline?
Despite the monthly decline, UPI’s year-over-year performance continues to be strong. Compared to November 2023, the transaction volume increased by 38%, and the transaction value grew by 24%. These figures indicate a strong upward trend in the adoption and usage of UPI for digital payments. The decline in November is seen as a minor fluctuation rather than a trend reversal, driven by specific short-term factors.
What Factors Led to the Drop in UPI Transactions in November?
Several factors have contributed to the marginal drop in UPI transactions. Post-Diwali consumers spending decrease as the festive season concludes. This year has witnessed economic temporary shifts, changes in spending patterns due to inflationary pressures, and cautious consumer behavior. Together, these factors have resulted in a short-term decline in UPI transactions.
How Did Other Digital Payment Systems Perform in November?
While UPI saw a decline, other payment systems exhibited mixed performance in November. The Immediate Payment Service (IMPS) recorded 408 million transactions worth IN ₹5.58 lakh crore. Meanwhile, FASTag transactions, which facilitate electronic toll collection, increased by 4% rising to 359 million from 345 million in October. Furthermore, the Aadhaar Enabled Payment System (AEPS) saw 92 million transactions with a total value of IN ₹23,844 crore. These statistics highlight the diverse dynamics of digital payments in India.
What Is Driving the Rise in UPI Fraud Cases and How to Prevent It?
The growth in UPI transactions has been accompanied by an increase in fraud cases. In FY24, there was an 85% rise in UPI fraud incidents increasing from 7.25 lakh in FY23 to 13.42 lakh. The value of fraudulent transactions nearly doubled, rising from IN ₹573 crore to IN ₹1,087 crore. The rise highlights the need for enhanced security protocols and user awareness to prevent fraud.
How Will UPI Maintain Growth Amid Challenges in the Short Term?
Despite the marginal decline in November, the long-term outlook for UPI remains positive. Digital payment in India continues to expand, fueled by technological advancements and an increasing user base. Efforts to improve security, along with ongoing innovations, are expected to sustain the growth trajectory of UPI and other digital payment systems.
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Mallika Sadhu is a journalist committed to revealing the raw, unfiltered truth. Mallika's work is grounded in a dedication to transparency and integrity, aiming to present clear and impactful stories that matter. Through comprehensive reporting and honest storytelling, she strives to contribute to provide narratives that genuinely inform and engage. When not dwelling in the world of journalism, she is immersed in the colors of her canvas and pages of her journal.
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