India’s Unified Payments Interface (UPI) has once again cemented its position as the dominant force in the digital payments ecosystem, achieving a remarkable 83.4% share of the total payments volume in FY25, as per the Reserve Bank of India (RBI) annual report for the fiscal year. This marks a notable increase from 79.4% in FY24, reflecting continued user trust, ease of use, and ongoing innovation in the payment space.

Exponential Growth in UPI Transactions

During FY25, UPI processed 185.8 billion transactions, up from 131.1 billion in FY24, which represents a robust year-on-year growth of 41.7%. The sheer scale of this growth not only highlights UPI’s technological robustness and interoperability, but also underscores India’s rapid shift towards a digital-first economy.

In contrast, credit card usage rose to 4.7 billion transactions, a moderate growth from 3.5 billion in FY24. However, debit card usage dropped sharply by 29.5%, falling from 2.2 billion to 1.6 billion transactions. This indicates a clear behavioural transition from card-based payments to mobile-based instant payment systems.

India’s total non-cash retail payments volume — which includes UPI, cards, and prepaid instruments — rose to 222.6 billion transactions in FY25, a significant 34.8% increase from 165.1 billion in the previous year. Notably, digital transactions accounted for 99.9% of all non-cash retail payments, further solidifying India’s position as a global leader in digital finance adoption.

Why UPI Leads the Charge

UPI’s success can be attributed to a combination of factors:

• Zero-cost transactions for users, especially for peer-to-peer transfers.

• Real-time settlements and 24x7 availability, including on holidays.

• Integration with multiple apps like Google Pay, PhonePe, Paytm, BHIM, and bank-specific platforms.

• Merchant QR code acceptance across small and large businesses, enabling ease of business and eliminating card machines.

• Multilingual support, enhancing accessibility in rural and semi-urban areas.

RBI’s Strategic Plans for FY26

Looking forward, the Reserve Bank of India has outlined several key initiatives aimed at refining and securing the digital payments ecosystem further.

1. Survey on Usage of Digital Payments

The RBI will soon conduct a “Survey on Usage of Digital Payments”, targeting individuals and businesses across varied geographies. The objective is to:

• Understand consumer behaviour and preferences.

• Identify barriers to adoption.

• Inform future regulatory and infrastructural decisions.

2. Digital Payments Intelligence Platform (DPIP)

To combat rising threats of digital payment fraud, the RBI, in collaboration with the Reserve Bank Innovation Hub (RBIH), is developing a Digital Payments Intelligence Platform. The prototype is already in progress, with multiple banks participating. The platform aims to:

• Detect and prevent payment fraud in real time.

• Enhance monitoring and analytics capabilities across the ecosystem.

• Facilitate secure and efficient payment operations, especially with growing transaction volumes.

Authorisations and Regulatory Oversight in FY25

During the fiscal year, the RBI granted regulatory approvals to:

• 26 online Payment Aggregators.

• 5 cross-border Payment Aggregators.

• 11 non-bank Prepaid Payment Instrument (PPI) issuers.

• 1 Trade Receivables Discounting System (TReDS) platform.

In addition, 84 payment system operators underwent on-site inspections, reflecting the RBI’s active supervision and commitment to ensuring secure digital transactions.

Global Expansion of UPI: NPCI's Vision

A significant component of UPI’s evolution lies in its global outreach through NPCI International Payments Ltd (NIPL). By FY29, the aim is to enable UPI-based real-time payments in 20 countries, facilitating a seamless experience for:

• Tourists.

• Overseas students.

• Cross-border business travellers.

As of FY25, UPI QR code acceptance is live in seven countries:

• Bhutan

• France

• Mauritius

• Nepal

• Singapore

• Sri Lanka

• United Arab Emirates (UAE)

In addition, RuPay card acceptance has expanded to Nepal, Bhutan, Mauritius, Singapore, UAE, and the Maldives, further bolstering India’s payment footprint.

New approvals have also been granted to establish UPI-like infrastructure in:

• Namibia

• Peru

• Trinidad and Tobago

• Jamaica

This aligns with India’s larger vision of making its digital public infrastructure a global utility, especially for developing and underserved economies.

Key Drivers Behind UPI’s Global Push

India's international expansion of UPI is driven by:

• Bilateral agreements with central banks and financial regulators.

• Demand from NRIs and Indian tourists.

• Cost-effective technology and scalability.

• Interoperability standards that adapt well to global payment systems.

This internationalisation is also seen as part of India’s digital diplomacy efforts, promoting its indigenous platforms as safe, efficient, and inclusive solutions for global financial inclusion.

Challenges and the Road Ahead

Despite the impressive growth, UPI and India’s digital payment landscape face challenges such as:

• Cybersecurity risks, especially with rising fraud attempts.

• Digital literacy gaps, particularly in rural regions.

• Infrastructure limitations in areas with poor internet connectivity.

• Resistance from certain merchant segments, especially those unfamiliar with digital tools.

To counter these, the RBI is working closely with stakeholders to:

• Implement robust grievance redressal mechanisms.

• Introduce user protection guidelines.

• Promote awareness and digital onboarding campaigns.

Additionally, UPI’s future roadmap includes:

• Offline UPI payments through NFC and sound-based technologies.

• UPI credit offerings, allowing users to make credit-based UPI payments.

• Tokenization of UPI credentials for better security.

• Expansion of UPI Lite for small-value, high-volume transactions without internet.

Conclusion: India’s Journey Towards a Cashless Economy

FY25 has been a watershed year for digital payments in India, with UPI leading the charge towards a truly cashless economy. With 83.4% of all payment volume flowing through UPI, it is no longer just a domestic success story—it is a global digital finance phenomenon.

As the RBI continues to foster innovation, strengthen regulations, and expand infrastructure, and as NPCI deepens global partnerships, India’s digital payment ecosystem is well on track to become a benchmark for the world. The coming years will likely see UPI evolving from a national payment system into a pillar of global financial inclusion, connecting people, businesses, and economies like never before.

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