UPI Transactions Fall 1.8% In September To 24.07 Billion Ahead Of October 15 MDR Rollout

Monthly transactions on the Unified Payments Interface (UPI) declined 1.8% in September to 24.07 billion from a record 24.51 billion in August, according to data released by the National Payments Corporation of India (NPCI).

Despite the fall in transaction volume, the value of UPI payments increased 1.5% to ₹29.37 trillion during September. The figures come ahead of the October 15 introduction of a merchant discount rate (MDR) on select UPI transactions.

Festival spending lifts daily UPI payments

UPI recorded 802 million transactions a day in September, with a daily value of ₹97,913 crore. Both figures were monthly records, while daily transaction volumes crossed the 800-million mark for the first time.

Daily UPI payment value had remained around ₹96,000 crore from April to August even as transaction volumes increased, as many of the additional payments were relatively small. In September, higher-value festival spending pushed the daily value above that level.

UPI transactions were 23% higher in volume and 18% higher in value than a year earlier. Industry executives expect digital payment activity to gain further momentum during the festival season as consumers increasingly use UPI for online and offline purchases.

MDR rollout set for October 15

The September data comes amid concerns among industry groups over the introduction of MDR, which will end nearly six years of zero-charge UPI transactions for certain payments.

From October 15, peer-to-peer transactions will remain free, while specified person-to-merchant transactions above ₹2,000 will attract an MDR of 0.40%, capped at ₹300. Payments received by small vendors under the designated P2PM category will also remain free.

Meanwhile, IMPS transactions declined more than 1.7% month-on-month to 354 million, although their value increased slightly to ₹7.06 trillion. Aadhaar Enabled Payment System transactions fell 8% to 95.78 million, while their value declined 9% to ₹23,734 crore.