UPI Growth and Its Impact on Banking Transactions

Abstract

This study examines the growth trajectory of India's Unified Payments Interface (UPI) and its multidimensional impact on banking transactions, profitability, and financial inclusion from fiscal year 2016-17 to 2023-24. The study adopts a quantitative research approach grounded in the Platform Economics framework (Rochet and Tirole, 2003) and the UTAUT2 model (Venkatesh et al., 2012). Primary data were collected from 150 respondents comprising banking professionals, FinTech practitioners, and urban digital payment users through a structured questionnaire. Secondary data were sourced from NPCI, RBI, World Bank, and BIS CPMI databases. Strong internal consistency (Cronbach's Alpha > 0.87) was verified through reliability analysis. Descriptive statistics, Pearson correlation, and multiple regression analysis were employed for data analysis using SPSS. Regression results (R² = 0.758) reveal that UPI transaction growth, payment channel substitution, and financial inclusion are significant positive predictors of UPI adoption intention, while non-interest income decline and ATM withdrawal reduction reflect significant structural disruptions in banking operations. Social influence, digital infrastructure, and perceived usefulness emerged as dominant adoption drivers. The study provides strategic and regulatory recommendations for banking institutions and policymakers to navigate the structural transformation induced by UPI.