Merchant Payments on UPI Expected to Reach $1 Trillion by FY26: Report
A report by Bain and Company reveals that merchant payments on the Unified Payments Interface (UPI) may reach $1 trillion by FY26. The growth rate of 40-50% will be the driving force for this increase, along with higher awareness, merchant acceptance of UPI, and the introduction of new payment features such as UPI Lite and UPI 123 Pay. Additionally, the opening up of international payment corridors on the domestic payment railroad will aid in this growth.
UPI Lite and Its Benefits
UPI Lite is a new feature launched by Paytm Payments Bank Limited to facilitate faster UPI payments for small-value transactions. It eliminates the need for UPI PIN for payments up to Rs 200.
The Role of UPI in Creating a Non-Cash Economy
UPI is a game-changer by NPCI, as stated by Rakesh Pozhath, Partner and Leading Member of Financial Services Practice, Bain & Company. In 2022, unified payment interface transactions in semi-urban and rural stores saw a sharp increase of 650%. This increase in transactions shows a shift in consumer behavior in these regions, with more citizens adopting assisted digital means for their banking and lifestyle requirements and getting incorporated into the formal economy.
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