A Decade of Digital Revolution: How UPI Transformed Global Payments

MUMBAI — As the Unified Payments Interface (UPI) marks its 10th anniversary, the numbers tell a story of an unprecedented financial revolution. From a modest beginning of 1.8 crore transactions in the 2016-17 fiscal year, the platform has surged to an astounding 24,162 crore transactions in FY26—a staggering 13,000-fold growth that has fundamentally altered the economic landscape of India.

Today, nearly one in every two real-time payments made globally occurs on the UPI platform, cementing its status as arguably the most successful innovation under the current government.

The Origin Story: Solving the “IMPS Dilemma”

The journey began with a strategic challenge. AP Hota, the founding chief of the National Payments Corporation of India (NPCI) and the architect behind most of its early products, reveals that UPI was born out of a desire to overcome the limitations of the Immediate Payment Service (IMPS).

While IMPS was a breakthrough in real-time banking, it was primarily designed for person-to-person transfers and struggled to meet the needs of the merchant ecosystem. “UPI began as an attempt to redesign IMPS so as to simplify merchant payments, involve non-bank payment providers, and reduce e-commerce payment failures,” Hota explained. “We moved away from IMPS to build an entirely new solution, retaining only its proven real-time settlement engine.”

A Vision for Interoperability

The platform’s architectural brilliance relied on the collaborative efforts of industry stalwarts. With Nandan Nilekani serving as the technology and public policy advisor, and Pramod Verma spearheading the design, the team pivoted to an API-driven, open-source model.

“Pramod and Nandan came up with the idea of making the entire system API-driven, with third-party application service providers,” Hota noted.

Current NPCI chief Dilip Asbe, who served as the Chief Operating Officer during the launch, has often highlighted the decentralization of the system as a key factor in its scalability. Unlike traditional platforms that rely on a single massive, centralized database, UPI was built as a decentralized, open protocol that resolves payment addresses in real-time across various participating banks.

From Pilot to Powerhouse

Following a pilot test led by former RBI Governor Raghuram Rajan in April 2016, the system was released to the general public. The architects intentionally opted for a phased rollout—starting with simple peer-to-peer transfers before introducing complex features like recurring mandates.

While critics once doubted the platform’s ability to handle massive scale, the reality has far exceeded initial expectations. Reflecting on his 2017 farewell speech, Hota recalled forecasting that the platform would eventually handle a billion transactions a day—a target that, given the current trajectory, stands as a testament to the UPI ecosystem’s enduring impact on how the world views digital money.