Indian Economy News

Unified Payments Interface (UPI) contribution to payments ecosystem volume grows to 83.4% in FY25

India’s Unified Payments Interface (UPI) significantly strengthened its dominance in the payments ecosystem during FY25, with its contribution to transaction volume rising to 83.4%, up from 79.4% in FY24. According to the Reserve Bank of India’s (RBI) annual report for FY25, UPI processed 185.8 billion transactions, marking a robust 41.7% increase from 131.1 billion transactions in the previous year. Meanwhile, credit card transactions grew to 4.7 billion in FY25 from 3.5 billion in FY24. In contrast, debit card transactions declined sharply by 29.5% to 1.6 billion from 2.2 billion. Overall, India’s total payments, including various payment systems, card payments, and prepaid payment instruments (PPIs), increased by 34.8% to 222.6 billion transactions in FY25, up from 165.1 billion in FY24. Digital transactions accounted for nearly the entire volume of non-cash retail payments at 99.9%, marginally up from 99.8% in FY24.
Looking ahead to FY26, the RBI plans to conduct a ‘Survey on Usage of Digital Payments’ to gain deeper insights into user transaction behaviour and challenges. The regulator will continue to foster innovation and alternative payments development, including the creation of a Digital Payments Intelligence Platform (DPIP) to combat digital payment fraud. This initiative is being developed in collaboration with the Reserve Bank Innovation Hub (RBIH), which is working on a prototype with several banks. The RBI is also working to streamline cross-border payment beneficiary processing and may introduce regulatory policies in consultation with stakeholders. During FY25, the RBI authorised 26 online Payment Aggregators, five cross-border Payment Aggregators, 11 non-bank PPI issuers, and one Trade Receivables and Discounting System (TReDS) platform while conducting on-site inspections of 84 payment system operators. On the international front, NPCI International Payments Ltd (NIPL) is extending UPI’s real-time payments system to 20 countries by FY29. Indian UPI QR code acceptance is now live in Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the United Arab Emirates (UAE), enabling seamless payments for Indian tourists, students, and business travellers. Additionally, RuPay card acceptance has expanded to Nepal, Bhutan, Mauritius, Singapore, the UAE, and the Maldives, with approvals granted to deploy UPI-like infrastructure in Namibia, Peru, Trinidad and Tobago, and Jamaica.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.