India’s digital payments landscape has witnessed an extraordinary surge, led by the Unified Payments Interface (UPI), which now accounts for over 85% of all digital transactions. Backed by the Aadhaar stack, Jan Dhan accounts and widespread smartphone access, UPI has reshaped both person-to-person and merchant payments, penetrating rural markets and enabling seamless micro-transactions.
Cross-border UPI linkages and real-time settlement infrastructure have cemented India’s role as a global fintech pioneer. New features—credit-on-UPI, conversational and offline payments, and advanced fraud-monitoring systems—are broadening its reach. As merchant participation grows and public-private collaboration deepens, UPI continues to drive a secure, inclusive and interoperable digital economy.
India’s payments ecosystem has seen extraordinary growth, with digital payments now dominating the country’s transaction landscape. In the first half of 2025, digital payments accounted for 99.8% of total transactions by volume and 97.7% by value, according to the Reserve Bank of India (RBI). Out of total payment transactions worth ₹1,572 lakh crore, ₹1,536 lakh crore were conducted digitally.
These figures reflect a steep progression over the past decade. In 2019, digital transactions made up 96.7% of volume and 95.5% of value. However, these shares had climbed to 99.7% (volume) and 97.5% (value) in 2014. Digital transactions have surged 38-fold in volume and three-fold in value over ten years, clocking a CAGR of 52.5% in volume and 13% in value for the decade ending 2024. Over the past five years alone, digital payments have grown 6.6 times in volume and 1.6 times in value, translating to a five-year CAGR of 46% in volume and 10% in value.
India’s digital payments infrastructure includes a diverse mix of instruments such as UPI, IMPS, NEFT, RTGS, cards, mobile wallets, and net banking. Among these, the Unified Payments Interface (UPI) has emerged as the most widely used fast payment system, driven by its ease of use, 24×7 functionality, and quick settlement features.
In H1 2025, UPI processed 10,637 crore transactions worth ₹143.3 lakh crore, compared to ₹117 lakh crore in the same period of 2024. It accounted for 85% of payment transactions by volume, but only 9% by value during the first six months of 2025, highlighting its role as the preferred platform for frequent, low-value retail payments.
In contrast, RTGS and CCIL systems handle high-value wholesale transfers, with RTGS requiring a minimum of ₹2 lakh per transaction, making them central to India’s Large Value Payment System infrastructure. Together, these systems demonstrate India’s rapidly advancing digital payments ecosystem, driven by strong infrastructure, widespread user adoption, and supportive regulatory policies.
UPI’s story started not with an app, but with a bold idea: enabling India, a nation of over a billion people, to skip traditional banking barriers and enter the digital age seamlessly. This transformation was built on what policymakers later termed “Digital Public Infrastructure,” driven by three foundational reforms.
With this groundwork laid, NPCI launched UPI in 2016 as an open, interoperable platform. Unlike closed digital wallets, UPI allowed real-time bank-to-bank transfers across any app. Its simplicity changed the game—no wallet top-ups, no app exclusivity, just instant secure payments from any bank to any bank, making digital finance truly universal and inclusive in India.
Unified Payments Interface (UPI) is a real-time payment system that allows users to link multiple bank accounts to a single mobile application from any participating bank. It brings together various banking services, seamless fund transfer options, and merchant payments on one platform. UPI also supports peer-to-peer payment requests, enabling users to send or schedule payment requests conveniently.
The system was launched in pilot mode by the National Payments Corporation of India (NPCI) with 21 member banks. The pilot was officially unveiled on April 11, 2016, in Mumbai by then RBI Governor Dr. Raghuram G. Rajan. Following the launch, participating banks began releasing their UPI-enabled applications on the Google Play Store, making it accessible to users nationwide.
UPI functions through key participants including the Payer Payment Service Provider (PSP), Remitter Bank, NPCI, Beneficiary Bank, bank account holders, and merchants. Together, they enable smooth fund transfers across banks and platforms.
UPI offers several benefits to customers, merchants, and banks. It operates 24×7, enabling instant transfers anytime. Users can access multiple bank accounts through a single app and make secure payments using a Virtual Payment Address (VPA), eliminating the need to share sensitive details. The platform supports single-click, two-factor authentication and allows users to raise complaints directly through the mobile app.
What makes UPI exceptional is-
UPI serves a wide range of payment needs — from utility bills and retail shopping to donations, collections, and disbursements — making it extremely adaptable. By removing the hassles of exact cash payments and reducing reliance on ATMs, it simplifies daily transactions. This broad utility and convenience make UPI a powerful, scalable, and efficient digital payment solution for both consumers and merchants.
Building on this strong momentum, the National Payments Corporation of India (NPCI) has increased the Unified Payments Interface (UPI) transaction limit for Person-to-Merchant (P2M) payments. Effective 15 September 2025, users can now make merchant payments of up to ₹10 lakh per day in select verified categories, enabling broader use of digital payments for high-value transactions.
Currently, UPI represents nearly 85% of all digital transactions in India — a figure that goes beyond numbers to signify a profound behavioural shift. It reflects how seamlessly UPI has integrated into everyday life, from street-side vegetable vendors in small towns to women entrepreneurs running businesses in rural markets.
Unified Payments Interface (UPI) has recently overtaken Visa to become the world’s largest real-time payment system by daily transaction volume. UPI processes around 65 crore transactions a day, surpassing Visa’s about 64 crore and Mastercard’s nearly 45 crore. Remarkably, UPI has achieved in just nine years—across seven countries—what Visa and Mastercard could not in over six decades operating in more than 200 nations.
Beyond scale, UPI handles one of the most demanding workloads globally, settling over 7,500 transactions per second instantly. At present, UPI forms a robust digital payments ecosystem with 491 million users, 65 million merchants, 675 banks, and 80+ apps integrated into the platform.
UPI adoption has been highest in digitally connected and tourism-driven regions including-
India’s success has positioned UPI as a global payments leader. Internationally, UPI is officially accepted in France, Nepal, Bhutan, Singapore, Sri Lanka, UAE, Mauritius, and Qatar.
(value in Billion)
Table: Top 5 real time markets by volume; Source: ACI worldwide
The platform continues to evolve with innovations like UPI vouchers for transferring money to non-UPI users, conversational UPI supported by Bharat GPT, and AI-based fraud detection with auto-blocking under development. New NPCI measures will also make UPI over 33% faster, alongside the introduction of pre-approved credit lines via UPI.
During June 2025, the IMF rolled out a Fintech Note titled “Growing Retail Digital Payments: The Value of Interoperability,” highlighting India’s Unified Payments Interface (UPI) as a global model.
The report praised UPI—launched in 2016—for dramatically reshaping India’s digital payments landscape and offering valuable lessons for other nations. The recognition continued in September 2025, when the IMF’s Finance & Development magazine featured an article titled “India’s Frictionless Payments.” It explained how UPI has evolved into the world’s largest real-time payment system by volume, handling over 19 billion transactions each month. (Notably, In August 2025, the system processed more than 20 billion transactions worth over ₹24.85 Lakh Crore.)
The IMF noted that India’s approach demonstrates the power of interoperability in boosting consumer convenience, reducing reliance on cash, and driving financial innovation. For a nation historically dominated by cash transactions, this acknowledgment underscores India’s remarkable achievement in building an inclusive, fast, and efficient digital payments ecosystem that is now setting standards globally.
India’s digital payments journey stands as a landmark achievement in inclusive fintech innovation. With UPI driving over 85% of transactions, expanding global acceptance, and earning IMF recognition, India has redefined real-time payments at scale. As transaction limits rise, global partnerships deepen, and AI-enabled security strengthens the ecosystem, UPI is poised to further accelerate financial inclusion, empower small businesses, and position India as a global leader in digital finance.
Read more:
Unified Payments Interface (UPI
UPI: India’s Digital Revolution Goes Global
10+ Freshly Updated UPI Statistics for 2025
FAQs:
1. What makes UPI different from other digital payment systems?
UPI allows instant bank-to-bank transfers using a mobile phone, without needing account numbers, IFSC, or card details. Its interoperability enables payments across any UPI app and bank, unlike digital wallets restricted to their platforms. With 24×7 real-time settlement, QR-based payments, and virtual payment addresses (VPA), UPI provides simple, secure, and universal digital payments.
2. Why is UPI so widely used in India?
UPI’s popularity stems from ease of use, zero transaction cost for users, instant money transfers, and availability across all banks and apps. Government initiatives like Jan-Dhan, Aadhaar, affordable data, and smartphone penetration accelerated adoption. It supports micro-payments, merchant payments, P2P transfers, and rural financial inclusion, making it accessible for everyone—from street vendors to enterprises.
3. Can UPI be used for high-value transactions?
Yes. While traditionally focused on small ticket payments, UPI now supports large-value merchant payments. As of September 2025, the limit for verified merchant categories has increased to ₹10 lakh per day, making UPI suitable for sectors like education, healthcare, and financial services.
4. How does UPI benefit small businesses and street vendors?
UPI enables small merchants to accept digital payments without expensive POS machines or card fees. QR codes are easy to use, and funds settle instantly into bank accounts. This boosts sales, reduces cash handling, eliminates the need for exact change, and builds digital credit history for future loans.
5. Is UPI used outside India?
Yes. UPI is expanding globally and is currently accepted in countries like Singapore, UAE, France, Nepal, Bhutan, Sri Lanka, Mauritius, and Qatar. Partnerships with international networks and foreign banks are enabling seamless cross-border transactions for tourists, NRIs, and businesses, making UPI a global payment standard.
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