Thread by @surajbrf

This thread celebrates the occasion of UPI transaction value crossing the $100 billion a month mark, reaching $103 billion in Oct 2021, up from $87 billion in Sept.

npci.org.in/what-we-do/upi…

UPI transaction value grew 18% MoM in Oct, aided by a 17% MoM growth in volume.

1/

Trailing 12 month transaction volume is now 34.5 billion . This is by a distance the most of any country in the world, having gained almost 10 billion from the FY 2020-21 end volume: dazeinfo.com/2021/05/11/rea…

The slope of this graph is going parabolic:

2/

Trailing 12-month transaction value is currently $852 billion, on track to cross $1 trillion before fiscal year end in March 2022.

The value graph is also accelerating now, and in fact Covid was an inflection point from where UPI has accelerated in adoption and use.

3/

This is underscored by the volume and value graphs since April 2020:

After cratering in April 2020, it quickly recovered to prior month level within one month.

It has since QUADRUPLED in both value and volume in the subsequent 1.5 years.

4/

The two Covid waves have dramatically accelerated adoption. A (somewhat imperfect) comparison against recent RBI M1 data

Oct UPI transaction value: Rs.7.71 lakh cr
Oct 8 RBI M1 currency in circulation: Rs.29.2 lakh cr

rbi.org.in/Scripts/BS_Pre…

@harshmadhusudan

5/

Notably, value/transaction has remained quite stable over the past 1.5 years, increasing slightly from Rs.1510/transaction in Apr 2020 to Rs.1830/transaction in Oct 2021.

In other words, the average value is stable at $20-25, but with exponential rate of growth in volume.

6/

Another view of the scale of trailing 12-mo value data:
Oct 2021: $852B
Oct 2020: $397B
Oct 2019: $218B
Oct 2018: $56B
Oct 2017: $5B

The network effect is in stark view here, and underlines the drive towards the rapid formalization of economic activity.

7/

India’s GDP is under $3 trillion at current exchange rates. UPI volume is already on track to top $1 trillion by year end or early 2022 .

Unlike M1 currency in circulation, UPI gives policymakers a more detailed view of where and how transactional growth is happening.

8/

In fact, a depression in value/transaction with a large growth in volume is likely a policy benefit/imperative, since it indicates dramatic growth in formalization of otherwise low value cash activity.

swarajyamag.com/news-brief/dig…

9/

Given the stunning doubling in TTM UPI value to $852B in Oct 2021, and an acceleration in growth, it’s hard to predict what it will look like in Oct 2022, but approx $2 trillion is likely. It will cross $1 trillion within the next 2-3 months.

UPI has come a long way.

10/10