10X growth in UPI possible through incentivisation: NPCI CEO Dilip Asbe

Unified Payments Interface (UPI) has the potential to grow 10X in the coming five years, believes Dilip Asbe, Managing Director and CEO of National Payments Corporation of India (NPCI).

Speaking at the second edition of TechSparks Mumbai, Asbe said this growth will be achieved on the back of capital commitment and incentivisation for the consumer and merchant ecosystem.

“UPI has been the beneficiary of the JAM (Jan Dhan-Aadhaar-Mobile) trinity of the government. From the consumer standpoint, there is a 2X to 3X market because we have a network of smartphones and data,” Asbe said in a fireside chat at YourStory’s flagship startup event on Friday. “We can get 300 million users on the platform tomorrow, but this will need the players (banks and fintechs) to spread awareness and some incentive in the form of cashback to reach out to them.”

On the merchant side, Asbe added that there was a market for 10 crore merchants to be onboarded on UPI payments, NPCI's instant real-time payment system.

“We need feet-on-street and solid capital to onboard another five crore merchants. The network effect will help and the growth will come in over the next 15 years, but if we want to expedite it to the next five years, we will need capital,” he added. 

As of October 2023, UPI had over five crore merchants on its network. 

According to the latest data shared by NPCI, UPI transaction volume stood at 12.10 billion, an annual growth of 61%, and processed Rs 18.28 lakh crore in February 2024. NPCI launched UPI in 2016 and has since seen exponential growth in digital transactions. 

Besides the incentive and capital, he said regulatory bodies and NPCI will have to continue adding new features to UPI to expand the use cases.

“From a use case standpoint, we have to keep building features. Recently, SEBI and RBI announced secondary transactions on UPI. We have also introduced QR codes and UPI AutoPay mandates, and NPCI will have to deliver on new features. However, NPCI, banks and fintechs will have to consistently invest into creating a scalable, robust secure infrastructure for 10X growth,” said Asbe. 

NPCI is also working on taking UPI outside of India through NPCI International Payments Limited (NIPL), incorporated in 2020, to facilitate payments by Indian tourists and cross-border transactions.