UPI Hits Record High: 18.68 Billion Transactions in May, Up 4.4% MoM

The number of transactions using the Unified Payments Interface (UPI) increased 4.4% from 17.89 billion in April to 18.68 billion in May, setting a new record.

 There were 33% more trades than the previous year. UPI transactions experienced a 2.2% month-over-month (MoM) decline in April. The National Payments Corporation of India (NPCI) reported that UPI transactions totalled INR 25.14 Lakh Cr in May, a 5% increase from INR 23.95 Lakh Cr in April.

Compared to 596 million in April, the average daily transaction count increased to 602 million in the reviewed month. In addition, INR 81,106 Cr was the average daily transaction value.

PhonePe and Google Pay Lead the Race

PhonePe and Google Pay are anticipated to remain the top two UPI players, as they have for years, even though the NPCI has not yet released the app-by-app data for the month of May.

Together, the two companies control around 80% of the UPI ecosystem's market share, with Paytm coming in second with a roughly 7% stake in recent months. Of the 17.89 billion transactions in total, PhonePe logged 8.36 billion in April.

6.48 billion transactions of INR 8.42 lakh crore were registered by Google Pay. The competition is fierce outside of the top three players. Navi, CRED, super.money, Amazon Pay, and FamApp are just a few of the companies that keep fluctuating in the rankings.

Notably, over the past few years, the NPCI has been aiming to limit third-party application providers' (TPAPs') market share in the UPI ecosystem to 30%. The idea has, however, been repeatedly delayed; the most recent one was moved to December 31, 2026.

Industry Requesting for Zero Merchant Discount Rate

The industry is increasingly calling for zero merchant discount rates (MDR) on these transactions, even as UPI is expanding. Prime Minister Narendra Modi received a letter earlier this year from the Payment Councils of India (PCI) urging him to reevaluate the 0% MDR policy for RuPay and UPI transactions.

When banks or payment service providers handle digital transactions through UPI, they charge merchants a fee known as the MDR. To encourage digital payments across the nation, the price was reduced to zero in 2020. For large merchants exclusively, the PCI suggested charging an MDR of 0.30% for UPI.

The Startup Policy Forum (SPF) also endorsed the initiative. The payments sector has long maintained that the zero MDR regime prevents them from making money off of their services, which has an impact on infrastructure upgrade efforts.

The administration hasn't made a decision on the subject yet, though. Vijay Shekhar Sharma, the founder and CEO of Paytm, recently stated that the implementation of MDR on UPI payments might lead to more competition.