India’s UPI hits record October transactions on festive surge

India’s digital payments platform recorded its busiest October ever, with Unified Payments Interface (UPI) transactions reaching 25.47 billion, a 23% increase compared to the same month last year. The total transaction value climbed to Rs 31.53 lakh crore, up 16% from October 2022 and marking the highest figure ever. Consumers relied on UPI for both holiday purchases and routine expenses during the month.

The spike in activity aligned with major festive events, including Navratri, Durga Puja, and early e-commerce promotions such as Amazon’s Great Indian Festival and Flipkart’s Big Billion Days. While these events usually drive sales, demand for electronics, like smartphones and laptops, remained subdued, with prices rising 30-40% due to higher memory chip costs. According to reporting, revenue from these sales events fell 10-12% year-over-year, particularly in higher-end product categories.

Daily transaction volumes also broke records, averaging 822 million in October, up from 802 million in September. The highest single-day volume occurred on October 9, with 873 million transactions, the weekend before Navratri, while activity remained strong through October 19, the day before Dussehra. The average daily transaction value rose to Rs 1.01 lakh crore, exceeding September’s Rs 97,913 crore.

This performance followed a decline in September, when UPI transactions dropped to 24.07 billion from 24.51 billion in August, and transaction value fell to Rs 29.37 lakh crore from Rs 29.82 lakh crore. The slowdown preceded the festive peak, when consumers typically increase spending on electronics, clothing, and food. However, higher costs for essential goods appear to have reduced some of that demand.

The government’s decision to postpone a proposed merchant discount rate (MDR) on UPI transactions until after Diwali likely supported the October rebound. By delaying the fee increase, the move prevented additional costs from affecting payments during the critical shopping period, benefiting both consumers and merchants.

Analysts project transaction volumes will remain raised in November, coinciding with festivals like Dhanteras and Diwali. Traditional purchases, such as gold, could drive higher-value transactions, according to Akshay Mehrotra, managing director and group CEO of digital lender Fibe. The platform’s ongoing growth shows UPI’s dominance as the preferred payment method for daily use and seasonal spending, despite economic challenges.