UPI Drives 85 per cent of India’s digital payments in H2 2025

MUMBAI: India’s wallets may still carry cash, but the country’s thumbs are clearly doing most of the spending. India processed a staggering 77.6 crore digital payment transactions every single day in 2025, according to the Reserve Bank of India’s Payment System Report for December 2025, underlining just how deeply digital payments have woven themselves into everyday life. At the centre of this payment storm stood Unified Payments Interface better known as UPI which continued its near-total domination of India’s transaction landscape.

The RBI report showed that UPI accounted for 85.5 per cent of total payment transaction volumes during the second half of 2025, cementing its status as the country’s default mode of daily payments, from roadside tea stalls to luxury retail counters.

And the scale-up has been nothing short of explosive.

UPI transaction volumes surged to 12,191 crore in H2 2025, compared to just 1,530 crore in H1 2021, highlighting how quickly India has embraced instant, smartphone-led payments over the past four years.

The central bank noted that overall digital payment volumes in India have expanded 33 times over the last decade as real-time payment systems gained wider acceptance and consumers steadily drifted away from cash-heavy transactions.

While UPI dominated by sheer volume, Real Time Gross Settlement, or RTGS, continued to rule the heavyweight division.

RTGS accounted for a mere 0.1 per cent of transaction volumes but contributed a massive 68.6 per cent of the total transaction value during the period, reinforcing its role as the preferred channel for high-value transfers.

Consumer spending habits also appeared to be evolving rapidly.

Credit card spending climbed sharply to Rs 23.2 lakh crore in calendar year 2025, up from Rs 8.9 lakh crore in 2021. Private sector banks tightened their grip on the segment as their share of outstanding credit cards rose to 71.1 per cent.

Meanwhile, debit cards continued sliding towards digital retirement.

Debit card transaction volumes dropped 67 per cent between 2021 and 2025 as QR-code payments and app-based transfers increasingly replaced plastic swipes.

The Bharat Bill Payment System, or BBPS, also witnessed strong momentum. Transaction values under the platform jumped more than 16 times over four years to reach Rs 14.8 lakh crore, reflecting growing comfort with digital utility and recurring payments.

India’s toll booths are becoming increasingly cashless too.

FASTag issuances crossed 11.87 crore, while the number of toll plazas integrated into the network rose to 1,896 nationwide.

The RBI report also highlighted India’s growing ambitions to export its digital payments success story globally. UPI QR-code payments are now operational in eight countries, including France, Singapore and the United Arab Emirates, signalling India’s push to position its payment infrastructure on the world stage.

As digital payments accelerated, cheques quietly faded further into the background. Their usage continued to decline, although the average cheque ticket size increased by 35 per cent suggesting that cheques are now largely reserved for bigger-ticket transactions rather than everyday spending.

In short, India’s payment habits are no longer just changing, they are tapping, scanning and pinging their way into an entirely new economy.