In a riveting conversation that unfolded with Mohammad Asad, an emerging economist and highly regarded researcher from India, the spotlight was on the intricate tapestry of the Indian economy. Asad, a luminary in financial analysis, offered a compelling journey through the evolution of the Unified Payments Interface (UPI), providing profound insights into its transformative impact and the prospective role it could play in shaping India’s economic destiny.
Currently pursuing postgraduate studies at the prestigious Indian Institute of Technology (IIT) Kanpur and an alumnus of the esteemed Indian Institute of Management (IIM) Ahmedabad, Asad’s academic background brings a depth of understanding to his research. His dual expertise as a Computer Engineer and Economic and Financial Researcher lends a unique perspective to the analysis, showcasing a holistic approach to comprehending the intricacies of UPI and its implications on India’s financial landscape in his recently published research on Outlook India.
At the heart of the dialogue was the remarkable growth trajectory of UPI highlighted in his research, a digital payment platform that has become nothing short of a financial rockstar since its inception in 2016. Asad illuminated the trajectory, emphasizing how UPI started with a modest 21 banks but swiftly soared to encompass over 350 platform partners by mid-2023. The onboarding rate, a staggering 35% over the past three years, reflects the platform’s magnetic pull in the financial landscape.
The statistics shared by Asad painted a vivid picture of UPI’s ascent. From achieving 1 billion monthly transactions in October 2019 to surpassing 10 billion in July 2023, and hitting the milestone of 1 billion USD monthly transactions value in November 2017, UPI’s growth is nothing short of meteoric. These milestones not only showcase its success but also underscore its vital role in the burgeoning digital economy.
The conversation seamlessly transitioned to the competitive landscape, where UPI emerged as the undeniable frontrunner, leaving traditional payment methods trailing in its wake. Asad’s research highlighted UPI’s growth rate of 90% over the last three years, eclipsing Credit Cards and IMPS. While IMPS displayed a commendable 35% growth, Credit Cards lagged behind at 10%. Even stalwarts like RTGS and NEFT witnessed a decline, further solidifying UPI’s dominance.
What added an intriguing layer to the discussion was Asad’s use of machine learning to study user segmentation within UPI transactions. The segmentation revealed three prominent clusters based on Monthly Average Transactions Value, offering a nuanced understanding of the platform’s user dynamics. As UPI matured, a distinct cluster for low to medium-value daily transactions emerged, signifying its evolving user base and maturation.
The outcomes of Asad’s study weren’t just limited to statistics; they unraveled profound trends that signal shifts in consumer behavior. The average UPI transaction size experienced a notable drop, indicative of a preference for low to medium-value deals. As we peer into the future, Asad’s predictions suggest that by Q1 2025, UPI’s total transaction volume could exceed a staggering 200 billion, playing a pivotal role in financial inclusion for students, youth, and low-income individuals, thereby contributing to overall GDP growth.
In summarizing UPI’s role in India’s economic future, Asad expressed a sentiment echoed by many in the financial sector – UPI is a game-changer, not just domestically but with the potential to make waves globally. As other countries express interest in adopting the UPI model, it becomes increasingly clear that the platform’s success is a testament to its efficacy and adaptability. Connect with him on LinkedIn – linkedin.com/in/txtasad/
In essence, the conversation with Mohammad Asad was not just an exploration of UPI’s journey, it was a deep dive into the transformative power of technology in shaping the economic narrative of a nation. Asad’s adept analysis and insightful observations elevate him to the status of an analytics guru, and his predictions, though bold, underscore the potential for UPI to redefine financial landscapes well into the future. Visit his website txtviews.com for detailed insights. As an accomplished author, his literary prowess further enhances the accessibility and impact of his research, solidifying his reputation as a thought leader in the financial domain.
