Interviewer: Hey Mohammad, great to have you here! Your research insights recently published on Outlook India about UPI’s journey in India’s economy making use of Machine Learning is making waves.
For our viewer, Mohammad Asad in as Indian Computer Engineer, an emerging economist, and a brilliant researcher & author born to humble middle class parents in Uttar Pradesh state of India. Mohammad’s extensive analysis, leveraging Machine Learning, offers valuable insights into UPI’s evolution, its impact on the digital economy and future trends. UPI is a new peer to peer payment transfer platform in India launched by the National Payment Corporation of India (NPCI) in alignment with the government’s cashless economy initiative. Asad is currently a post grad student at prestigious Indian Institute of Technology (IIT) Kanpur and is also an alumni of the esteemed Indian Institute of Management (IIM) Ahmedabad. Goes without saying that he is a luminary in financial analysis.
Asad, can you give us a quick break down on what you found?
Mohammad Asad: Thanks for having me and appreciating my contributions! In a nutshell, I dug into how UPI, our digital payment rockstar, has been changing the game since its launch in 2016. It’s not just cost-effective but a game-changer in shaping India’s financial landscape.
Interviewer: Cool! So, spill the beans on UPI’s growth. How’s it been shaking things up?
Mohammad Asad: It’s been a wild ride! UPI started with 21 banks and skyrocketed to over 350 platform partners by mid-2023. The onboarding rate has been a cool 35% over the past three years. UPI hit 1 billion monthly transactions in October 2019, cruised past 10 billion in July 2023, and scored 1 billion USD monthly transactions value in November 2017.
Interviewer: Impressive! Now, let’s talk competition. How’s UPI leaving traditional payment methods in the dust?
Mohammad Asad: Oh, it’s killing it! UPI’s growth rate of 90% over the last three years puts Credit Cards and IMPS in the shade. IMPS is doing its thing with a 35% growth, while Credit Cards are trucking along at 10%. RTGS and NEFT in the same timeframe have been on a declining trend.
Interviewer: Love the energy! UPI transactions seem to be on a crazy rise. Any milestones or future predictions we should know?
Mohammad Asad: Definitely! My crystal ball says UPI will outrun NEFT (tradition bank transfer mechanism for payments in India) in yearly transactions value by 2025. Most importantly, UPI’s yearly transactions value could top the GDP of countries like Germany and Japan by then. It’s just what my mathematical model says, with an assumption that that no internal or external factors affects the present trend. So, not sure if prediction is the right word here, but yeah if you want to use that word, who am I say otherwise!
Interviewer: Sweet! Hesitation to call it a prediction! Alright, what’s the deal with user segmentation that u talked about in your research? How’s UPI’s popularity evolving?
Mohammad Asad: I used Machine Learning to study these UPI transactions in detail and found that it has 3 prominent clusters or basically three groups of transactions types. Initially when the volumes were low it had 2 clusters with low monthly average transaction value and high monthly average transaction value but as the platform matured and had high volumes, a new cluster with low to medium average transaction value emerged. It shows how UPI is maturing, with an average per million ticket size of low to medium daily transactions value gaining steam.
Interviewer: Nice breakdown! Any cool outcomes from your study that we should know about?
Mohammad Asad: Oh, plenty! The average UPI transaction size has dropped, signaling a love for low to medium-value deals as we just discussed. By Q1 2025, total volume would be topping 200 billion transactions. It’s also set to play a big role in financial inclusion for students, youth, and low-income folks, boosting GDP growth.
Interviewer: Exciting stuff! To wrap it up, what’s your take on UPI’s role in India’s economic future?
Mohammad Asad: UPI is a game-changer, not just for India but potentially on a global scale. My insights using fancy Machine Learning tricks already showcases how this tech marvel is shaping our economic future. The fact that other countries are also hopping on the UPI bandwagon is a big proof of its success! For detailed insights please visit my website txtviews.com or contact me on LinkedIn – linkedin.com/in/txtasad/
Interviewer: Dude, thanks a bunch for breaking down this mind-blowing research in such a cool way. UPI is stealing the spotlight in India’s money game!
Mohammad Asad: Well, you should be thanked for that! Now that we’ve delved in some details, a question for you. What’s your take on my findings and trends or predictions as you might call it?
Interviewer: A counter question, huh? Haha, you’re not leaving any room for compliments! So, your predictions are on the hot seat till mid-2025. Your wild claim about UPI’s annual transactions beating Germany’s GDP is like predicting the next big hit. If that happens, you’re the analytics guru! And your keen observations on UPI are getting nods not just from me but from financial and analytical big shots inside and outside this room. Kudos!
Just a laid-back chat about the financial revolution.