UPI Projected to Handle 90% of Retail Payments
Industry experts project that India's Unified Payments Interface (UPI) will soon handle over 90% of all retail digital transactions in the country. This growing dominance is reinforced by reports highlighting how UPI's simplicity has driven widespread adoption among small, tech-averse merchants, who now see it as a primary mode of receiving payments. For commerce platforms, UPI is now considered a default consumer and merchant expectation.
- A PwC India report projects that UPI transaction volumes will surge from 131 billion in fiscal year 2023-24 to 439 billion by 2028-29. This growth is anticipated to increase UPI's share of all retail digital payments to 91% by FY29, up from its current 80%. - The growth in UPI is increasingly driven by person-to-merchant (P2M) transactions, which saw a 35% volume increase in the third quarter of 2025. The average ticket size for P2M payments has been shrinking, indicating deeper penetration into everyday micro-transactions for items like groceries and transit. - While UPI dominates transaction volume, it accounts for a smaller portion of the total value, highlighting its use for small-ticket purchases. In the first half of 2025, UPI handled 85% of all digital transaction volumes but only 9% of the value. In contrast, the RTGS system handled 69% of the value with just 0.1% of the volume. - To promote adoption, the Indian government has provided significant financial incentives, with budgetary support for the RuPay and BHIM-UPI scheme rising from ₹1,389 crore in FY 2021-22 to ₹3,631 crore in FY 2023-24. This support has helped expand the UPI QR code network from 93 million to 658 million. - The National Payments Corporation of India (NPCI) is expanding UPI's capabilities beyond simple payments by integrating value-added services. New and upcoming features include pre-sanctioned credit lines, voice-enabled payments, and tools for managing recurring payments like subscriptions and bills. - UPI is expanding internationally, with plans to be active in 20 countries by fiscal year 2029. It is already accepted in several nations including France, Singapore, the UAE, and Sri Lanka, aiming to simplify payments for Indian tourists and support cross-border remittances. - To facilitate use by foreign visitors in India, NPCI has piloted "UPI One World," a wallet that allows travelers to make UPI payments without needing an Indian bank account or local mobile number.
