UPI Controls 85.5% Of India’s Digital Payments, RBI Report Shows

Key Takeaways
 

1. UPI processed 85.5% of the total digital payments in India in H2 2025, as per the latest Payment Systems Report published by the RBI. India currently processes 77.6 crore payments each day.
    
2. UPI’s market share stood at 85% in H1 2025. The average ticket size of UPI has reduced from ₹1,848 in 2021 to ₹1,313 in 2025, which indicates an increased number of small payments.

India’s Digital Payments Reach New Heights: UPI Accounts for 6 Out of 7 Digital Transactions Made in India

UPI had captured 85.5% of India’s total digital payment transaction share in H2 2025, as per the half-yearly Payment Systems Report published by the RBI. Out of every 7 digital payments made in India, 6 went through UPI. 

This means that more merchants, from street vendors to online businesses, in the short-term would continue to receive digital payments. However, with increased use of UPI, there has been a rise in instances of fraud, particularly among first-time users based in smaller cities and towns.

Impact on How Every Indian Makes Payments

The statistics speak for themselves. Total payment volumes have risen from 6,437 crore in 2021 to 26,819 crore in 2025. In terms of value, there has been an increase from ₹1,741 lakh crore in 2021 to ₹3,215 lakh crore, with a CAGR of 42.9% in volumes and 16.6% in value.

This is how the payment systems compare in H2 2025:

UPI dominates in terms of volume, but not in value. This is mainly because most UPI transactions are small-ticket transactions, such as buying groceries, booking cabs, or buying a cup of tea. 

While the volume of debit card transactions has declined by 67%, from 4.087 billion in 2021 to 1.336 billion in 2025, credit card transaction volumes have more than doubled to 5.7 billion. Indians are rapidly transitioning away from plastic money and even cash. 

Expert Insights & Areas of Improvement

Speaking at the launch of the half-yearly Payment Systems Report, RBI Executive Director Vivek Deep highlighted the evolution of India’s payment systems.

They have become “more efficient, inclusive, and resilient” and play a critical role in India’s digital transformation and economic growth.

UPI has integrated India’s cash-based economy into the formal sector, according to a joint report by NPCI and BCG published during Global Fintech Fest 2025.

It has also spurred growth among microbusinesses and fostered confidence in digital payments.

However, challenges persist. Many low-income and digitally excluded women find their bank accounts underutilized and access to digital payments restricted. 

Experts believe that the focus should now shift to rural internet coverage, UPI 123PAY for feature phone users, and digital literacy initiatives. 

Conclusion

UPI has now emerged as the default payment method used by Indians. The growth in numbers cannot be disputed. However, the key challenge going forward would be to ensure that the growth touches the lives of those who have no choice but to make payments in cash.

FAQs 

Does the introduction of UPI benefit the middle class and poor Indians with respect to payments?

UPI has helped in making transactions quicker, more convenient, and more cost-effective for millions of Indians belonging to the middle class or poor sections of society. Small business owners, street vendors, and even wage laborers can now receive payments without requiring any kind of card machine. There is a need for better Internet connectivity, digital education, and feature phone compatibility to make UPI more inclusive.

Is UPI safe enough, being the most common digital payment mode in India?

UPI is considered relatively safe as it employs a PIN verification process along with other methods like bank security and real-time authentication. The number of fraudulent transactions and scams has also increased, particularly among novice users, with the rising popularity of UPI.