UPI transactions dip 1.7% by value in April after record March

Despite a slight month-on-month dip in Unified Payments Interface (UPI) transaction value and volume in April, daily transaction averages reveal a robust and growing demand for digital payments across India, further bolstered by new RBI authentication frameworks.

After record highs in March, Unified Payments Interface (UPI) transaction value dipped 1.7 per cent in April to Rs 29.03 trillion, down from Rs 29.53 trillion the previous month.

Volume declined 1.3 per cent to 22.35 billion compared to 22.64 billion in March, according to data from the National Payments Corporation of India, which operates UPI.

Understanding the Monthly Dip

“April’s slight month-on-month dip is more due to UPI’s overperformance in March than an overall slowdown.

"The financial year-end usually drives a surge in payments.

"The more telling signal is that daily transaction volumes rose from 730 million in March to 745 million in April.

"That matters because daily averages strip out the end-of-year distortions and reflect a growing demand,” said Akash Sinha, cofounder and chief executive officer of Cashfree Payments, a fintech.

Year-on-year, April saw a 25 per cent rise in volume and a 21 per cent jump in value. March clocked the highest volume and value numbers since UPI became operational in April 2016.

Digital Payments Becoming Everyday Life

“It is becoming clear that digital payments are no longer just about growth — they are becoming a natural part of everyday life.

"In rural and semi-urban areas, consumers and small businesses are not just trying digital payments, but are actively relying on them for daily transactions,” said Anand Kumar Bajaj, founder, managing director and chief executive officer, PayNearby.

Performance of Other Digital Payment Systems

Immediate Payment Service (IMPS) transactions dipped 1 per cent to 362 million in April, compared to 366 million in March.

In value terms, they declined by 5 per cent to Rs 7.01 trillion versus Rs 7.4 trillion in March.

Daily IMPS transactions grew more than 2 per cent from 11.8 million in March to 12.08 million in April.

FASTag transactions fell by 1.6 per cent to 358 million compared to 364 million in March.

Transactions worth Rs 7,025 crore were made in April, down 2 per cent from Rs 7,193 crore in March.

Daily transactions increased from 11.73 million to 11.94 million during the same period.

The number of Aadhaar Enabled Payment System transactions declined by 15 per cent to 94 million from 111 million in March.

Value declined by 14 per cent to Rs 27,640 crore, compared to Rs 31,956 crore in March.

Impact of RBI Frameworks

“The Reserve Bank of India’s two-factor authentication framework, which replaced blanket OTP dependency from April 1, will directly address persistent [UPI] friction points like failed authentications in low-connectivity areas where SMS delivery is unreliable,” said Sinha.

“As biometric and device-native authentication scale up, we expect fewer transaction failures, higher checkout completion rates, and meaningfully better success rates across Tier-II and Tier-III geographies.

"The e-mandate framework notified on April 21 consolidates recurring payment guidelines, which should accelerate auto pay adoption,” he added.