UPI transaction volume expected to rise to 439 billion by FY29: PwC India report

The total transaction volume on UPI is expected to increase to 439 billion by 2028-29 from about 131 billion in the last financial year and account for 91 per cent of overall retail digital payments, said a PwC India Report.

The report titled 'The Indian Payments Handbook -- 2024-29' also said India's digital payments landscape has witnessed remarkable growth over the past eight years and the industry is projected to expand more than three times in volume, from 159 billion transactions in 2023-24 to 481 billion by 2028-29.

In terms of value of payment transactions, the market growth is expected to double, from Rs 265 lakh crore to Rs 593 lakh crore over the same period.

The PwC India report said UPI continues its remarkable growth trajectory with a year-on-year growth in transaction volume of 57 per cent, it said.

"In FY 2023-24, the total transaction volume was slightly over 131 billion and is expected to grow to 439 billion by 2028–29. UPI now accounts for over 80 per cent of the overall retail digital payments in India and is expected to contribute to 91 per cent by 2028-29," the report said.

It further said credit cards have witnessed a formidable growth in 2023-24 with the industry adding more than 16 million new ones.

With the addition of new cards, the industry has also seen 22 per cent and 28 per cent surge in transactional volume and value, respectively.

On the other hand, debit cards have seen a dip in both transactions volume and value owing to the shift in preferences by cardholders.

Credit cards are expected to reach 200 million by 2028-29, the PwC India report said, adding that newer feature innovations, product propositions and customer segments are expected to contribute towards this growth.

Mihir Gandhi, Partner and Payments Transformation Leader, PwC India, said over the next five years, the payments industry will prioritise expanding ecosystems and exploring new use cases for existing platforms.

"Key growth drivers will include embedded finance, ecosystem finance, digital lending based on payment data, and offline payments. In India's dynamic payments landscape, innovation, interoperability, higher security measures and financial inclusion are shaping the path towards a more seamless digital economy," Gandhi said.

The report said the infrastructure for merchant acquiring, both online and offline, has been expanding not only in metros and tier 1 cities but also in tier 2, 3, and 4 cities.
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