Statsguru: From cash to clicks, mapping India's UPI-led payments shift

From demonetisation to the UPI boom, India's payments landscape has shifted decisively from cash to clicks, with digital modes now dominating both volume and value

Prime minister Narendra Modi earlier this month said India’s growth fact sheet was the success story of the “Reform, Perform and Transform” mantra while pointing to the emergence of the Unified Payments Interface (UPI) as one of the key reasons behind the transformation. The payment ecosystem in India has witnessed a remarkable transformation in recent years with overall digital transactions now accounting for over 97 per cent of both volume and value of total payments.   

The shift from cash to digital accelerated sharply after the 2016 demonetisation drive, with the digital share in total volume of payments crossing 90 per cent initially and now covering almost all such transactions. 

 

Digital payments constituted over 90 per cent of total value of payments even before  demonetisation. Their share slowly moved to 97.5 per cent now. 

 

UPI handled 84 per cent of volume of digital transactions in FY25 but just 9 per cent of value, while Real Time Gross Settlement (RTGS) dominated with 70 per cent of value despite processing under 1 per cent in volume. 

 

UPI’s growth accelerated sharply after the pandemic, rising from 37 per cent digital transactions by volume in FY20 to over half by FY21, and further to 84 per cent by FY25.  

 

Person-to-person transfers still dominate UPI in both volume and value, though merchant transactions are slowly moving up. 

 

Credit card transactions overtook debit cards by volume in FY24, while credit card values surged sharply after FY21.