Digital Payments – UPI Continues Leading India’s Expanding Transaction Ecosystem
Digital Payments – India’s digital payments landscape continued to witness rapid growth during the second half of 2025, with the Unified Payments Interface (UPI) accounting for the overwhelming majority of transaction volumes across the country, according to the latest half-yearly report released by the Reserve Bank of India (RBI).
UPI contributed 85.5 per cent of the total transaction volume during the period, reaffirming its position as the most widely used payment platform for daily retail transactions. National Electronic Funds Transfer (NEFT) and Prepaid Payment Instruments (PPIs) followed with 3.6 per cent share each, while Real Time Gross Settlement (RTGS) represented just 0.1 per cent of the overall volume.
RTGS Maintains Dominance in Transaction Value
Although RTGS processed a limited number of transactions, it remained the largest contributor in terms of overall transaction value. The RBI report stated that RTGS handled 68.6 per cent of the total transaction value in the second half of 2025.
NEFT secured the second position with 14.9 per cent share in transaction value, while UPI contributed 9.5 per cent. PPIs accounted for only 0.1 per cent of the total value processed during the period.
The central bank noted that the data highlights the different roles played by each payment system. RTGS is mainly used for high-value transfers between institutions and businesses, whereas UPI has become the preferred platform for fast and convenient retail payments among consumers.
NEFT Continues to Play a Balanced Role
The report also pointed to the continued importance of NEFT within India’s financial system. NEFT remains relevant because it supports both low-value and high-value transactions with settlement typically completed within an hour.
Its strong presence in both transaction volume and value reflects its flexibility and dependable use across personal, business, and institutional payments. RBI observed that NEFT continues to serve as a bridge between retail payment systems and large-value settlement platforms.
Strong Growth Recorded Over the Last Decade
India’s digital payment infrastructure has expanded significantly over the last ten years. Between 2016 and 2025, transaction volumes increased by 33 times, while transaction values nearly tripled.
The RBI report attributed this sharp growth to rising smartphone usage, improved internet accessibility, and the widespread adoption of digital payment services across urban and rural regions. The success of public digital infrastructure, particularly UPI, has also played a major role in accelerating cashless transactions nationwide.
According to the report, growing public confidence in secure and smooth digital payment systems has encouraged more consumers and businesses to shift away from cash-based transactions.
Five-Year Growth Highlights Rapid Adoption
The pace of expansion remained particularly strong during the last five years. Transaction volumes grew more than four times, while transaction values almost doubled during this period.
The report estimated the compound annual growth rate (CAGR) for transaction volume at 43 per cent and transaction value at 17 per cent over the recent five-year span. These figures underline the speed at which digital payments are being integrated into everyday economic activity across the country.
RBI data further showed that payment transaction volumes rose from 6,437 crore in 2021 to 26,819 crore in 2025. During the same period, transaction values increased from Rs 1,741 lakh crore to Rs 3,215 lakh crore.
This expansion reflects the growing maturity of India’s digital financial ecosystem and the increasing reliance on electronic payment methods by individuals, businesses, and government institutions alike.