Re 1 rise in UPI value trims debit card use by 14 paise: SBI Report

SBI Research report reveals that a Re 1 increase in UPI transaction value reduces debit card usage by 14 paise, reflecting UPI's growing dominance in India's digital payments landscape

A ₹1 increase in transaction value on Unified Payments Interface (UPI) has reduced the value of debit-card transactions by 14 paise between 2021 and 2025, according to a State Bank of India (SBI) Research report.

 

“It has been observed through time series analysis for the period from January 2021 to May 2025 that a ₹1 increase in UPI transactions actually reduces the value of debit card transactions by 14 paise,” the report said.

 

This comes at a time when UPI has maintained its dominant position in India’s digital payments and is gradually replacing the use of the debit card.

 

The share of UPI in retail demand for money — covering both transactions and debit-card ATM withdrawals — rose from 40 per cent in November 2019 to 62 per cent in January 2021.

 

By May this year, it reached 91 per cent, highlighting its increasing role in replacing cash, the report added.

 

In January 2021, UPI recorded 2.07 billion transactions, processing ₹3.86 trillion. This has grown sixfold to 18.67 billion, amounting to ₹25.08 trillion in value in May this year, according to the data from the National Payments Corporation of India (NPCI).

 

In FY21, the number of debit-card transactions stood at 4.02 billion, worth ₹6.62 trillion. This has dropped by nearly a quarter to 1.61 billion transactions, with a value of ₹5 trillion, according to the data from the Reserve Bank of India.

 

The report highlighted that state-owned banks were the top remitter members, while private banks were largely beneficiary members.

 

State Bank of India (SBI) in July was the top remitter bank with 5.2 billion UPI transactions, followed by HDFC Bank with 1.5 billion and Bank of Baroda with 1.3 billion.

 

Yes Bank was the top beneficiary bank, recording 7.9 billion UPI transactions in July, followed by SBI at 1.96 billion and Axis Bank at 1.94 billion in the same month.

 

Maharashtra leads in UPI with a 9.8 per cent share, followed by Karnataka at 5.5 per cent and Uttar Pradesh at 5.3 per cent. 

Payments battle

 

UPI share in total retail money demand rose from 62% in 2021 to 91% in 2025 

 

UPI transactions grew six-fold in four years, from 2.07 billion transactions (₹3.86 trillion) in January 2021 to 18.67 billion (₹25.08 trillion) in May this year 

 

In contrast, debit-card usage has slumped. Total debit-card transactions fell from 4.02 billion (₹6.62 trillion) in FY21 to 1.61 billion (₹5 trillion) by May 2025